Am I understanding this right, I could be either broke or a millionaire?

So let’s say I invest $1000 initially and then $200 a month into an S&P 500 index fund from vanguard. With a best case scenario of 10.5% returns (it’s average annual return since 1950)I’ll have over $1.2 million after 40 years (retirement).

Now my question is this. What if when I’m ready to retire the market is totally bad and we’re in a depression/major recession and all stocks lose all their value? Am I just screwed? How do people prevent this from happening to them come retirement age? I understand the idea of putting time in the market since the market always corrects itself, but is there something I seem to be missing? I don’t want to lose all my life savings because of a bad year come my retirement.

Do people tend to just postpone retirement a bit to wait for the market to correct if they happen to want to retire (and sell everything) if the market is ass?

Thanks for any replies!