For most of a career, the right investing instruction is simple: stay in, stay aggressive, ride out the volatility. That instruction has an expiration date. As you get close to actually needing the money, the same allocation that built your number can put it at risk right when you can least afford it.
Sequence-of-returns risk, in plain terms
The order returns arrive in matters, not just the average. A market drop in year 1 of retirement, while you're withdrawing money, does far more damage than the identical drop in year 20, because you're selling shares at depressed prices to fund withdrawals instead of simply riding it out. 2 portfolios with the exact same average return over 30 years can end up wildly different depending only on when the bad years happened to land.
What "build-to-preserve" actually means
It's the general principle of gradually shifting a portion of a portfolio from growth-focused holdings toward more stable ones as the time horizon for needing the money shrinks, especially in the years immediately before and after leaving full-time work. This doesn't mean abandoning stocks, most retirements last decades, so a meaningful growth allocation still matters well into retirement, but it does mean the mix that made sense earlier in a career, nearly all growth-focused, usually isn't the right mix in the years right around hitting your number.
The years right before and right after you stop working are the highest-stakes years for sequence-of-returns risk. That's exactly when a bad stretch does the most damage, and exactly when you have the least time left to recover from it.
A cash buffer changes the math
Holding a modest cushion of cash or short-term holdings, enough to cover a couple years of planned withdrawals, means a market downturn doesn't force you to sell depressed assets to fund near-term spending. The buffer isn't there to grow. It's there so you're never forced to sell low just because a bill is due.
This isn't a one-time switch
De-risking is usually gradual, spread over the years approaching the target, not a single decision made the week before leaving work. Exactly how much to shift, and when, depends on your specific timeline, other income sources, and risk tolerance, which is exactly the kind of decision worth a real conversation with a financial advisor rather than a generic percentage applied to everyone.
The portfolio that gets you to your number and the portfolio that protects it once you're there aren't the same portfolio. Shifting gradually toward preservation as the timeline shrinks, and holding a buffer against the worst possible timing, is what keeps a good plan from being undone by when the market moves, not just what it does.