Retirement is supposed to be the point when years of saving and investing finally start paying off.

But what if the timing is terrible?

Imagine retiring, beginning to draw on your portfolio, and then watching the ASX fall sharply within the first year.

That would be uncomfortable, but I do not think it automatically ruins a retirement plan.

The early years can be particularly important

A market crash becomes more difficult when an investor is withdrawing money at the same time.

If shares fall heavily and I need to sell some of them to fund living costs, I am locking in losses while the portfolio is already under pressure.

That can leave less capital available to participate in the eventual recovery.

This is often described as sequence-of-returns risk. The order in which good and bad years arrive can have a major impact once withdrawals begin.

Two retirees could earn the same average return over a long period and still end up with very different outcomes depending on when the weakest years occurred.

I would avoid relying on forced selling

If I were approaching retirement, I would want enough flexibility that I was not forced to sell ASX shares immediately after a large fall.

That could mean keeping some cash or lower-volatility assets available for near-term spending.

It could also mean holding companies that continue generating dividends through weaker markets like Coles Group Ltd (ASX: COL) or Telstra Group Ltd (ASX: TLS), although I would never assume those payments are guaranteed.

The aim would be to give the growth side of the portfolio time to recover.

I would still keep growth investments

A crash just after retirement might tempt an investor to move everything into cash.

I would be careful about doing that. Someone retiring at 60 or 65 could still have decades of investing ahead of them. Over that timeframe, inflation can gradually erode the purchasing power of a portfolio that is too defensive.

I would still want exposure to strong ASX businesses and potentially international shares or exchange-traded funds (ETFs) that can grow earnings over time.

The balance between growth and stability may change, but I would not want retirement to mark the end of long-term investing.

Spending can also be flexible

Another tool is simply adjusting withdrawals when the ASX share market is weak.

If the portfolio suffered a large fall, I might temporarily delay major discretionary spending or take slightly less from the portfolio if my circumstances allowed.

Even small changes can reduce the pressure to sell assets at poor prices.

That flexibility becomes much easier if retirement spending has been planned with some margin for error.

Foolish takeaway

An ASX share market crash immediately after retirement would be a difficult start, but it does not have to derail the years ahead.

I would want a retirement portfolio that gives me options during weak markets rather than depending on continually rising share prices.

For me, the combination of some near-term liquidity, ongoing growth exposure, diversification, and flexible withdrawals would make a bad first year far easier to manage.

The post What happens if the ASX share market crashes just after I retire? appeared first on The Motley Fool Australia.

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• How much do I need in my superannuation to earn $10,000 passive income every month?
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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX 200 healthcare shares are on a roll, up by a staggering 42% since the sector began a rapid rebound, after a horror year, on 3 June.

The S&P/ASX 200 Health Care Index (ASX: XHJ) reached a 9-year low on 3 June following a 39% 12-month pummelling.

Healthcare shares tanked due to many industry headwinds, including the FX rate for companies reporting in US dollars; cost of living pressures; higher shipping and labour costs, and US regulatory uncertainty for biotech businesses. 

Value investors have since swooped in, and reassuring FY26 results and guidance during earnings season last month propelled the rebound further.

Healthcare shares are now 42% higher since 3 June versus a 2% rise for the broader S&P/ASX 200 Index (ASX: XJO).

During the August earnings season, ASX 200 healthcare shares jumped 19% while the ASX 200 moved up 1.1%.

Here are 3 ASX 200 healthcare shares with buy recommendations and promising 12-month price targets from Bell Potter.

Mesoblast Ltd (ASX: MSB)

The Mesoblast share price is $2.21, down 0.9% today and steady over 12 months. 

Since 3 June, this ASX 200 healthcare share has risen 9.4%.

Bell Potter has a buy recommendation on Mesoblast shares with a $4.45 target.

This implies the Mesoblast share price could double over the next 12 months.

Analyst John Hester said: 

(All US$m) Revenues $120.2m and loss at the EBIT line -$49.9m were in line with our forecast. Ryoncil sales of $115m were at the mid-point of the guidance range.

Operating expenses $153m were dominated by R&D expense ($97m), driven by the investment in label expansion for Ryoncil and the ongoing Phase 3 trial for Rexlemestrocel in chronic lower back (CLBP).

Loss at NPAT $57.4m with net cash burn for the year -$43.8m inclusive of just -$13m in 2H26.

MSB has a long pipeline and label expansions for Ryoncil alone which we expect will come to market on a 3 to 5 year time horizon.

Pivotal moments in the short term include the interim readout on adult GvHD and the pending submission of the BLA for Rexlemestrocel in HF.

Neuren Pharmaceuticals Ltd (ASX: NEU)

The Neuren Pharmaceuticals share price is steady at $20.46 on Tuesday, and down 2% over 12 months.

Since 3 June, this ASX 200 healthcare share has streaked 51% higher.

Bell Potter has a buy rating on Neuren Pharmaceuticals shares with a $25.50 target.

This implies a potential 25% gain over the next 12 months.

Neuren Pharmaceuticals has also just started paying investors dividends.

Analyst Thomas Wakim said:

NEU remains very well capitalised with $286.5m in cash at 30-June. Considering the (1) strong cash position, (2) recent Daybue guidance upgrade, and (3) imminent Daybue launch in Europe, NEU have commenced a dividend program, starting with an interim dividend of $0.15/share (fully franked).

The dividend provides a moderate yield for shareholders, however capital growth will dominate future shareholder returns and is the reason to own the stock in our view, particularly as the binary Phase 3 readout in PMS draws closer (estimated in ~1H CY28), the result of which will largely determine whether NEU is a one-trick pony or whether they repeat the glory a second time round with NNZ-2591.

Sonic Healthcare Ltd (ASX: SHL)

The Sonic Healthcare share price is $19.44, down 0.7% today and down 15% over 12 months. 

Since 3 June, this ASX 200 healthcare share has risen 3%.

Bell Potter says ‘buy’ with a $27.50 target, suggesting a possible 41% upside ahead.

Analyst Martyn Jacobs commented:

SHL reported EBITDA of c.$1.92b (cc) which was within the guidance range of c.$1.87b – c.$1.95b.

On a reported basis, EBITDA of c.$1.93 was in line with consensus, but c.1.5% below BPe.

The result was impacted by a range of nonrecurring items that more than offset the one-off gain from the Brisbane lab sale &
leaseback transaction.

While the headline EBITDA margin was c.10bp lower than pcp, margins in the 2H showed meaningful improvement at c.19% v
c.16.7%.

The post 3 ASX healthcare shares to buy with 25% to 100% upside as sector rebound races higher appeared first on The Motley Fool Australia.

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• Sonic Healthcare shares crash 21%: What on earth is going on?
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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A $500,000 superannuation balance can start to take on a new purpose once retirement arrives.

After years of building the balance, the focus may shift towards what that money can provide each year.

There are several ways to approach that, and I would be careful not to focus on the biggest possible income number.

Start with a sustainable approach

For me, retirement income should come from investments I would still be comfortable owning for years.

That could mean holding a mixture of dividend-paying ASX shares, exchange-traded funds (ETFs), and other assets rather than filling the portfolio with whichever shares currently offer the highest dividend yields.

A large dividend can be tempting, but it becomes far less attractive if the underlying business struggles and eventually cuts the payment.

I would prefer companies with dependable cash flows and a reasonable chance of at least maintaining (but preferably increasing) their dividends over time.

What could the income look like?

How much income a $500,000 balance could generate depends on how the money is invested.

At an average yield of 4%, the portfolio would produce around $20,000 a year.

A 5% yield would increase that to approximately $25,000, while 6% would generate around $30,000.

I think somewhere in that range gives investors a sensible idea of what could be possible without assuming an unusually high yield.

The income would not necessarily stay the same every year. Dividends can rise, fall, or occasionally disappear, which is another reason I would spread the portfolio across several investments.

Which ASX shares might help?

Telstra Group Ltd (ASX: TLS) could be one income holding I would consider.

Its mobile and internet services generate recurring demand, while the company has placed a growing dividend at the centre of its shareholder return plans.

Aurizon Holdings Ltd (ASX: AZJ) offers another type of income exposure through rail infrastructure and freight operations.

I might also consider Sonic Healthcare Ltd (ASX: SHL). Diagnostic testing provides exposure to healthcare demand, and the company has a long history of returning cash to shareholders.

These would only form part of a broader portfolio. I would want enough diversification that my retirement income was not overly dependent on one company or industry.

Growth still has a role

A retiree may need their superannuation to last for decades.

That means I would still want some investments capable of growing earnings and distributions over time.

Inflation gradually reduces what $20,000 or $25,000 can buy, so a portfolio that can produce increasing income has an advantage.

I would also be comfortable selling a small amount of investments when necessary rather than insisting that every dollar of retirement spending must come from dividends.

Foolish takeaway

A $500,000 superannuation balance could potentially generate somewhere around $20,000 to $30,000 a year from investments yielding between 4% and 6%.

I would be more interested in building a durable income stream than pushing for the top end of that range.

For retirement, I think a diversified portfolio with dependable income and some room for growth gives that $500,000 the best chance to keep working for years.

The post How much passive income could a $500,000 superannuation balance generate? appeared first on The Motley Fool Australia.

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• $10,000 a year in passive income buying just $10k worth of ASX shares? Here’s how I’d go about it
• How much do I need in my superannuation to earn $10,000 passive income every month?
• Post-earnings: I’d buy these ASX dividend stocks for income today
• How I’d target $5,000 a year in passive income from ASX shares
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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.