Imagine you wake up tomorrow, pour your coffee, open your phone to check your accounts — and the stock market is worth zero. Not down 10%. Not a bad year. Zero. Every dollar you spent thirty years saving, gone overnight.

If some version of that thought has ever crossed your mind, you're not strange, and you're not paranoid. I hear it constantly, usually from people who are about to stop working and live off what they've built. It is one of the most common fears I run into in retirement income planning, and it deserves a real answer rather than a pat on the head.

The fear gets loudest right when the paycheck stops. As long as money is still coming in, a bad market feels like a storm you can wait out. The moment your portfolio becomes your paycheck, every dip feels personal.

Most articles on this would tell you to relax and stop worrying. I'm going to do the opposite. We're actually going to run the experiment — take the fear seriously, follow it all the way to the end, and see what's really there.

We'll answer three questions:

• What would it truly take for the market to hit zero?
• Has it ever actually happened, and to whom?
• And what's the drop you should be planning for instead?

Stay with me for that third one. That's the part that changes what you do on Monday morning.

I'm Daniel Masuda Lehrman, a Certified Financial Planner and founder of a fee-only fiduciary planning firm here in Honolulu. I work with people in the years right before and after retirement, and this fear comes up more than almost any other. So let's give it the serious treatment it deserves.

What Would "Zero" Actually Require?

Let's start by getting clear on what "zero" really means, because I think most people picture it wrong.

The stock market isn't a number on a screen. It isn't a casino. When you own stock, you own pieces of actual companies. Apple. Costco. The utility that keeps your lights on. The bank that holds your mortgage. When you own an index fund, you own tiny slices of thousands of these businesses at once — some of the most productive, profitable enterprises humans have ever built.

So for the market to go to zero, every one of those companies would have to become worthless at the same moment. Apple stops selling phones. Costco stops selling groceries. The power company stops delivering electricity. The pharmacy stops filling prescriptions. All of it. Simultaneously.

Sound familiar? It shouldn't, because it has never happened in the history of modern markets.

The Worst Days We've Already Lived Through

In 1929, the market lost nearly 90% of its value over about three years. It felt like the end of capitalism. It wasn't. Companies kept operating, and the market eventually recovered every dollar and then some.

In 2008, the financial system itself nearly seized up. Banks failed. The market fell more than 50%. And within a few years, it was back to new highs.

In March of 2020, we watched the fastest crash in modern history — roughly a third of the market's value gone in about a month. Terrifying. And it recovered in months, not years.

Every one of those was a genuine catastrophe in the moment. And in every single one, the businesses were still there when the dust settled. People kept buying groceries. Kept charging their phones. Kept paying their power bills. The companies survived, so the market survived.

If Stocks Are Worth Zero, So Is Everything Else

But let's push further. Let's say it somehow did happen. Every business on earth, worth nothing at once.

Here's the part most people never think through. If stocks are worth zero, the companies are gone. If the companies are gone, so are the jobs. So are the paychecks. So are the banks that depend on those paychecks getting deposited. The collapse doesn't stop politely at your brokerage account.

And now watch what happens to all the places people run to for safety.

• Cash? A dollar is only worth something because an economy agrees to honor it. In a world with no functioning businesses, that hundred-dollar bill is a nice piece of paper and nothing more.
• Gold? Gold only helps if someone healthy enough and stable enough to trade with actually wants it. In a true collapse, you can't eat it, and you can't spend it if nobody's selling.
• Real estate? Owning property means nothing without courts and a government to enforce that it's actually yours. A deed is just paper if there's no one left to honor it.

Here's the thing: every single "safe haven" people flee to leans on the exact same system the stock market leans on — a functioning economy, a stable government, the rule of law. Pull the foundation out from under stocks, and everything sitting above it comes down too.

So the real answer to "what happens if the market goes to zero" is this: at that point, it isn't a market problem anymore. It's the collapse of civilization itself. And no portfolio hedges against the end of the world. If that's genuinely what you're planning for, I'll be honest with you — you don't need a financial advisor. You need canned goods, clean water, and a very good fence.

But "impossible" is a strong word, and I don't like using it loosely. Because there actually are moments in history when a stock market really did go to zero.

When a Stock Market Really Did Go to Zero

It has happened. And it's worth sitting with the real examples, because they teach you exactly which fear is worth having and which one isn't.

Russia, 1917

Before the revolution, imperial Russia had a real, functioning stock market. Railroads, banks, oil companies — investors owned shares in all of it, the same way you might own an index fund today.

Then the Bolshevik Revolution swept in. The new government seized private industry across the board. Ownership of a company didn't drop in value. It was abolished. Shares became worthless overnight, and they never came back. Investors who had built fortunes over generations were wiped out completely.

China, 1949

Shanghai had been one of the great financial centers of Asia, with a thriving stock exchange. When the Communist Party took power, it shut the exchange down and nationalized private enterprise.

Same story. The market didn't fall. It ceased to exist. Everything invested in it was gone.

So yes — a market can go to zero. People have watched it happen and never recovered a cent. I'm not going to pretend otherwise.

What Those Two Events Actually Have in Common

Look closely, because it's the entire point of this article.

Neither one was a financial event. Nobody's portfolio was too aggressive. Nobody bought at the top or picked the wrong sector. No amount of clever investing would have changed the outcome by a single ruble or yuan.

These were revolutions. Violent, total, political revolutions. The market didn't crash. The entire system that gave shares any meaning at all was abolished by force. Private ownership itself became a crime.

And here's what most people miss when they use these examples to justify their fears. In those moments, no asset class saved anyone. Gold got confiscated at gunpoint. Cash got replaced with new currency that made the old bills worthless. Land got seized and redistributed. The safe havens weren't safe, because the thing that failed wasn't the market — it was the country.

So who actually kept their wealth? Not the people who diversified. Not the people who owned gold instead of stocks. The people who kept their wealth were the ones who saw it coming and left — who got themselves and whatever they could carry across a border before the door closed.

Which means if your plan for surviving a true market-to-zero event is to buy gold, or crypto, or bury cash in the backyard, I'd gently point out that none of that helped a single investor in 1917. The only real hedge against your own government ceasing to exist is not being there when it happens. And that's not a portfolio decision. That's a passport and a plane ticket.

The Drop Your Retirement Income Planning Should Actually Prepare For

So here's where we land. A true zero is either impossible, or it's a revolution — and in both cases, no portfolio saves you. Which means all that energy spent worrying about zero is aimed at the wrong target entirely.

The real question isn't "what if I lose everything?" It's "what if the market drops 45% the year I retire?"

Because that one is real. It happened in 2008. It nearly happened in 2020. Over a long retirement, a major drop isn't a possibility — it's close to a certainty. You will almost certainly retire into, or live through, at least one brutal bear market. And unlike a trip to zero, a big drawdown is completely survivable. But only if you're built for it.

Let me show you what I mean.

Meet Robert and Susan

They're both 63, retiring this year with $1.5 million saved, and they plan to pull about $60,000 a year from their portfolio to supplement their Social Security.

Now imagine the worst timing possible. In their very first year of retirement, the market drops 45%. Their $1.5 million becomes roughly $825,000 in a matter of months. It's the exact nightmare we've been talking about — not zero, but a real, gut-wrenching crash, arriving at the worst moment it possibly could.

Here's what determines whether they're going to be okay or in serious trouble. And it's not the size of the drop. It's whether they're forced to sell stocks while those stocks are down.

The Bad Version: Becoming a Forced Seller

Robert and Susan have everything in stocks, and they need that $60,000 to live on. So they sell.

But now they're selling into a market that's fallen 45%, which means they have to sell far more shares to raise the same $60,000. Those extra shares are gone forever. When the market eventually recovers — and it always has — those shares aren't there to recover with it.

Now do that again the next year, and maybe the year after. Every withdrawal at the bottom digs a hole the recovery can't fill.

This has a name. It's called sequence-of-returns risk, and it's the single biggest financial threat to a new retiree. Not a crash itself — a crash while you're a forced seller.

The Same Crash, With a Withdrawal Strategy in Place

Same Robert and Susan. Same $1.5 million. Same brutal 45% drop in year one. But this time, before they ever retired, they set aside two to three years of spending — call it $150,000 — in cash and short-term bonds. Safe, boring, not going anywhere.

When the crash hits, here's what they do with their stocks: nothing. They don't touch them. They live off the cash bucket instead. They give their stock portfolio the one thing it needs to recover — time.

They're not selling shares at the bottom, so when the market climbs back, their portfolio climbs right along with it. And as the market recovers, they gradually refill the cash bucket from the gains, getting ready for the next storm.

Same drop. Same couple. Same 45%. Two completely different retirements. One couple locked in their losses at the worst possible moment. The other simply waited it out in comfort. The only difference between them was structure — a decision made before the crash, not during it.

That's the whole game. You don't need to predict the crash. You don't need to time the bottom. Nobody can, and anyone who tells you they can is selling something. You just need to build your retirement so that when the drop comes — and it will — you're never the one forced to sell into it.

If you want to go a level deeper on the mechanics, I've written about staying the course through market volatility and about which accounts to draw down first — both are the natural next step from here.

Stop Planning for Zero. Start Planning for the Drop.

Let's put the fear back where it belongs.

The market going to zero is either impossible, or it's the apocalypse. Either way, it's not a risk you manage with a portfolio, and it's frankly not a risk you'd live long enough to regret. Worrying about it is like buying flood insurance for a world that's already underwater.

The 45% drop, though? That one's coming for all of us at some point in a long retirement. And here's the part I want you to hold onto: it is not something to fear. It's something to prepare for. Those are very different things.

With a little structure — a cash bucket, a plan for which accounts you draw from and when — the crash that sends everyone else into a panic becomes just another Tuesday for you.

So stop planning for zero. Zero will take care of itself, one way or another. Start planning for the drop that's actually real, because that's the one you can do something about.

If you'd like help building a retirement that can take a 45% punch and keep right on going, you can schedule a free consultation. I work with clients in Honolulu and virtually across the country. And if you'd like a quick read on where you stand before we ever talk, start with the free Retirement Readiness Assessment.

— Daniel Masuda Lehrman, CFP®, Founder of Masuda Lehrman Wealth. Mahalo for reading.

This article is for educational purposes only and is not personalized financial, tax, or legal advice.