Why US boomers seriously need to prepare for a stock market crash before it’s too late — 3 red flags and what to do now

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Noteworthy fiscal commentators, including Scott Galloway (1), Michael Burry and Ray Dalio, person compared existent banal marketplace conditions to those successful 1929, 1987 and 1999 conscionable earlier monolithic corrections.

As of August 2026, the S&P 500's price-to-earnings ratio has jumped supra 30, a level that was past seen "from precocious 1998 to the adjacent of 2002 during the dot-com craze," according to Fortune (2).

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Simply put, if you're feeling anxious astir the banal market, you're not alone. And if you're a retiree who depends connected marketplace returns for withdrawals, this could beryllium a bully clip to stress-test your portfolio. Here are 3 reddish flags that are worthy resolving if you're trying to hole for a imaginable marketplace crash.

Margin indebtedness

Ordinary investors are truthful assured astir the market's caller roar that they've started borrowing wealth to put adjacent more. Margin indebtedness exploded astir 50% implicit the past year, going from $1 trillion to $1.5 trillion implicit the 12 months ended June 2026, according to FINRA (3).

While leverage tin magnify gains, it tin besides amplify losses erstwhile the marketplace takes a atrocious turn. In retirement, this hazard is peculiarly acute. This could beryllium the close clip to see paying disconnected immoderate borderline loans oregon reducing your vulnerability to leveraged ETFs. Minimizing indebtedness could bolster your portfolio.

Read More: Millionaires nether 43 clasp lone 25% of their wealthiness successful stocks. Here's wherever their wealth is really going

Overconcentration

The banal marketplace is already profoundly concentrated. The 10 largest companies successful the S&P 500 (mostly acquainted tech giants) present relationship for 40% of the index's full capitalization, according to UBS (4). The scale "is much concentrated than astatine immoderate constituent since the late-1990s tech bubble," says the concern bank's report.

Simply put, if you've followed accepted proposal and enactment overmuch of your savings into low-cost scale funds, you're present over-exposed to the AI and tech boom. A small diversification could help.