Or perhaps not. You don't want to retire at a moment when the retirement fund is down 20% and decides to pay no interest on your savings for the next 10 years. Or not pay you at all.
It doesn't really matter. 20% down from peak after 30 years of growth is going to be far over your book value.
The Dotcom Bubble isn't coming back for 20%. It's coming back for everything.
age plays a role as well, a young investor would "let it ride", someone else may delay retirement for a year, or a retiree may reduce their spending for that year to let the portfolio recoup, a retiree could also have different buckets to pull from.
Isn't this precisely what target date funds are for?
they don't solve anything, because the market can still be down at the moment when they move your wealth to a less variable market.