Can You Actually Retire Without Investing in Stocks?

If you're a federal employee—or recently retired—you’ve probably been told some version of this:

And while that strategy has worked in theory for decades, the market of today is not the market of 1995. Or even 2015.

So here’s the hard question almost no one asks:

The short answer: Yes.

The longer answer: Yes—if you’re willing to rethink your assumptions about what really drives retirement security.

🧠 Step 1: Know What You’re Opting Out Of

Let’s be clear: when we say “stocks,” we’re talking about:

• TSP C Fund (S&P 500)

• TSP S Fund (small-cap U.S. stocks)

• TSP I Fund (international stocks)

• Any mutual funds or ETFs in outside IRAs or brokerage accounts

Historically, these have delivered long-term growth. But they also:

• Crash 20–40% with no warning

• Don’t generate predictable income

• Are sensitive to economic, political, and global risk factors

Because the stock market is not built for safety. It’s built for long-term capital appreciation—and only if you can stomach the ride.

But not everyone wants to retire with a parachute packed by Wall Street.

✅ Step 2: Know What You Still Have Without Stocks

Here’s what a non-stock retirement could look like for a federal employee:

🔒 1. Your FERS Annuity

This is your baseline. It’s inflation-adjusted, and it doesn’t care what the Dow is doing.

Every year of service makes this stronger. At 30 years of service, it's not uncommon for this to cover 50–60% of your essential expenses.

🪙 2. The TSP G Fund

The most misunderstood asset in the federal system.

The G Fund:

• Never loses value

• Yields long-term Treasury returns

• Is backed by the U.S. government

• Has no duration risk (it earns long bond yields without long bond volatility)

The G Fund is ideal for:

• Building a low-volatility “income bridge”

• Covering gaps between your annuity and spending needs

• Being your personal “cash reserve” without holding cash

A retiree who wants to avoid stocks entirely could keep 5–10 years of expenses in the G Fund and ladder withdrawals.

💰 3. Strategic Roth Conversions + Cash Buckets

If you don’t want to bet on growth, bet on tax control instead.

By converting traditional TSP or IRA funds into Roth accounts during early retirement (when your income is lower), you:

• Lock in today’s low tax rates

• Avoid RMDs (Required Minimum Distributions)

• Create tax-free income in your 70s, 80s, and 90s

Pair that with a 3–5 year cash flow ladder using short-term TSP withdrawals or CDs, and you’ve created an income system that doesn’t rely on bull markets.

🛡️ 4. Fixed Income + Annuities (If Used Wisely)

Most retirees don't need stock-like growth—they need income they can count on.

That’s why some are choosing:

• TSP Partial Annuity Option (convert a portion of your balance into lifetime income)

• SPIAs (Single Premium Immediate Annuities) through outside providers for simplicity and guaranteed monthly payments

• I Bonds or TIPS as inflation-protected low-risk assets

You’re not looking to “beat the market.” You’re looking to defeat uncertainty.

🔄 A Realistic Asset Allocation Without Stocks Might Look Like:

⚠️ What You Give Up By Avoiding Stocks

This isn’t a perfect solution—and it’s not for everyone.

If you go stock-free, you give up:

• Long-term compounding from equities

• Potential legacy growth (for heirs)

• The chance to outpace inflation significantly over time

But here’s what you gain:

• Peace of mind

• Stability

• A plan that still works even if the market doesn’t

You don't need to take market risk if you design your life around guaranteed income, stable reserves, and tax-smart withdrawals.

And in an era of global volatility, AI disruption, and political uncertainty—you might sleep better at night knowing your future doesn't swing with the market.

— FWR