By Jonathan Chevreau on September 24, 2026 Estimated reading time: 6 minutes

The CAPE ratio, the 4% rule, and retirement anxiety

By Jonathan Chevreau on September 24, 2026 Estimated reading time: 6 minutes

What retirement experts have to say now about surviving an untimely market crash.

If you’re retired or nearing it, by definition you’re in the retirement risk zone. After half a lifetime or so of prudent saving and investing, you’re now living in part on your accumulated capital and with luck some pensions and/or annuities provided by some combination of the government and past employers. 

While it’s nice to have some kind of retirement nest egg, the chances of a major stock market correction are an ever-present source of anxiety for many retirees, myself included. Sure, proper diversification and asset allocation should allow you to Stay Calm, which happens to be the title of a new book published in September by David Booth. He’s the founder of Dimensional Fund Advisors (DFA), one of the better indexing companies out there. 

I’ll refer you to a couple of blogs from my site that can add insight to the topic of retirement anxiety and overvalued stock markets. One is on the 4% rule, a topic we have explored in this very column as recently as late 2025 (here). The other is on Robert Shiller’s CAPE ratio, the Cyclically Adjusted Price-to-Earnings ratio (CAPE), which is a measure of how fairly valued or overvalued stocks may be. As I write this, U.S. stocks are considered to be on the expensive side even as the usual September swoon appears to be under way.  

My blog on the 4% rule appeared late in July. The blog on the CAPE ratio ran late in August. Each contains full quotes from a variety of business owners and investment professionals on both sides of........

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