If you’re lucky, you retire in a bull market. But should you bet on that?

It may come as a surprise, but we have been experiencing a bull market for the last several years. However, with the recession memories still fresh in people’s minds and suggestions of potential downside to come, many are asking, “What happens if I retire in a bear market?”

These are the key implications of retiring in a bear market.

It’s the worst time to lose money. There is never a good time to lose money. However, a study for financial services giant MetLife, Retirement Income and the Sensitive Sequence of Returns, authored by Moshe A. Milevsky, Ph.D. and Anna Anaimova, and published in 2009, demonstrated that the years immediately prior to and after retirement are, undoubtedly, the worst time to lose money.

The study showed that bear market investment returns during retirement, even in the span of just one year, have such a substantial impact that a portfolio runs out of money faster. Just how fast it runs out depends on your age when it occurs. A negative 20 percent return during the first year of retirement shortened the life of the portfolio cited in the study by approximately eight years. The same negative return occurring in retirement’s ninth year depleted the portfolio about four years earlier.

The key insight here: Although it never feels good to lose money, when you are retired, the older you are when a bear market occurs, the better off you are financially.

How you earn returns matters. The same study explored a slightly different implication. It looked at two sample portfolios where everything – starting balance, investments used, dollar amount withdrawn per year and more – was the same, except the order in which annual investment returns occurred.

The first portfolio earned 17 percent the first year, a negative 20 percent the second, and then gained 27 percent in the third year. It continued earning those same returns in 3-year cycles forever. In the second portfolio, the researchers simply rearranged the order, earning 27 percent in the first year, 17 percent the second and a negative 20 percent in the third year, repeating in 3-year cycles over and over again.

What the researchers found was striking. The first portfolio fizzled out nearly two years ahead of schedule while the second portfolio lasted about six years longer. Bear market returns can be difficult, if not impossible, for a portfolio to recover from.

Here are five things you can do now to be prepared for any market.

1. Take control by creating a plan. When it comes to building your retirement, focus on what you can control, which is generally how much you save, how conservative or aggressive you are, the amount you need each year to fund your retirement. and the age at which you retire.

What you can’t control is equally important. You don’t get a say over whether the markets will be bullish or bearish, or to what age you’ll live. A good plan helps you maximize what’s in your control and appropriately manage risk for what is not.

2. Be open to working longer. If you’re fortunate enough to be fit for work, be open to the idea. Don’t think you have to do the same job you’ve always done. Consider part-time opportunities. The extra year or two you spend working may translate into thousands of dollars per year in retirement income later, all because you don’t have to tap into as much of your assets as you would have retiring earlier.

For example, one of my clients works in the garden department at a big-box retailer. He sees it as stress relief, because he enjoys helping people with their yard projects. On top of it, he makes some extra cash. Financially, it means he doesn’t have to tap into some of his retirement assets until later.

3. Diversify. Diversification – spreading your money across a wide variety of asset classes and subcategories within asset classes – is one way to manage risk. Your 401(k) plan likely provides traditional ways to do this by offering equity investments that are large cap, small cap, and so on. However, opportunities beyond the traditional variety of stocks and bonds can complement the bigger picture and further reduce risk.

Some alternatives include real estate investment trusts, commodities, long-short funds, and managed futures. All of these are more dynamic money management tools than typical buy-and-hold options. You may only be able to find these options in your 401(k)’s brokerage window, which can bring the full market to your fingertips, and right inside your plan. If your plan doesn’t offer one, you could always go outside and augment your approach with a traditional individual retirement account or a standard brokerage account.

4. Take some of the risk off the table. One way to take some market risk off the table is to transfer it to an insurance company through an annuity. The use of annuities has been on the rise, partly due to new features that have improved their once clunky past reputation. Although they don’t make sense for everyone, they can serve to reduce risk for some.

5. Recognize the value of help. Only you can assess whether you are effective at managing your financial picture. From setting goals to implementing your plan, there are good options for getting help. And according to a 2011 study, Help in Defined Contribution Plans: 2006 through 2010, conducted by investment advice firm Financial Engines and employee benefits consultancy Aon Hewitt, help can make a difference.

The study compared the investment performance of 401(k) plan participants using one of three types of help – investment advice, target-date funds or managed accounts – to the performance of those not using this help. The difference was noticeable. The average annual median return of those using help was nearly 3 percent higher, net of fees, than those not using help.

Now that you know how a bear market can impact your retirement savings and what you can do about it, take action to be ready for the next phase of in the ever-shifting market cycle. When it comes to your money, repeat after me, “Protect first. Grow second.”

Securities offered through SII Investments, Inc. (SII), Member FINRA, SIPC. Advisory Services offered through Scarborough Capital Management (SCM), a Registered Investment Advisor. SII & SCM are separate companies. Neither SII nor SCM provide tax or legal advice.

Greg Ostrowski is a certified financial planner practitioner at Scarborough Capital Management , who helps clients with financial planning and investment management strategies. He believes that helping investors stick to their plan and making adjustments based on long-term goals rather than reacting to the market, will result in stronger portfolios. Greg lives in Annapolis, Maryland.