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Brexit, and how to score in your 'retirement red zone'

Look no further than the financial markets' reaction to Britain leaving the European Union for an example of how world events can take a toll on your investments, including your hard-earned retirement savings.

It's scary for investors of all ages, especially those just years away from retirement, like 63-year old Michelle Jegge, who says she has been putting money into stocks since her first Communion. Jegge owns a small insurance agency.

"I've been a big investor. That's the way to grow. It's a rocky road, but that's the way to grow," said Jegge, who lives in New Jersey with her husband.

"You need to come up with a plan that takes the market out of the equation." -Jeff Boyer, Regent Atlantic

Unlike younger workers, if you are five to 10 years away from retirement, you may not have the luxury of time to recoup steep losses in your portfolio. That puts you in what some financial planners call the "retirement red zone."

Jegge's financial advisor, Jeff Boyer of New Jersey-based Regent Atlantic, said you need to come up with a plan that takes the market out of the equation.

Sounds great, but how do you do it?

Boyer suggests making changes to your portfolio that give you greater diversification, minimize the taxes you will face and maximize your Social Security benefits—which may include holding off on claiming them until you're 70.

When it comes to diversification, that doesn't mean ditching stocks altogether, even if you're in your sixties. History shows no matter how bad the sell-off, it pays to keep at least something in equities.

T. Rowe Price looked at stock performance from 1928 to 2015. Even after accounting for all the major ups and downs, stocks have a better average annual return. Far better, actually: At 8.6 percent, they yielded better than bonds.

For near retirees, the trick is to not leave your money overexposed to risk as you get closer to that danger zone.

For someone in their 40s, T. Rowe suggests 80 percent to 100 percent in stocks and 0 to 20 percent in bonds.

For someone in their 50s, that allocation changes to 60 percent to 80 percent in stocks and 20 percent to 30 percent in bonds. Cash should be 0 to 10 percent.

If you're in your 60s, the mix gets more conservative, and changes to 50 percent to 65 percent in stocks, 25 percent to 35 percent in bonds and the remainder in cash.

Careful planning and risk management is helping Jegge not panic over market swings. She said she's looking forward to what lies ahead.

"Retirement means spending the last years of my life doing whatever I desire," she said. "I'm looking forward to them. It's like a whole new chapter."