Retirement & Income Planning
Tips and Tricks for Today and Tomorrow: Episode 6 – Sequence of Return Risk
This episode explains sequence of return risk, the danger that poor market returns early in retirement can permanently shrink a portfolio because you are withdrawing while values are down. It covers why the order of returns matters once you start spending and how planning can cushion against an unlucky early stretch.
This episode explains sequence of return risk, the danger that poor market returns early in retirement can permanently shrink a portfolio because you are withdrawing while values are down. It covers why the order of returns matters once you start spending and how planning can cushion against an unlucky early stretch.
Key takeaways
- Sequence of return risk is the chance that early-retirement losses do lasting damage because you withdraw during downturns.
- The order of returns matters far more once you are spending from a portfolio than while accumulating.
- Holding bonds or cash reserves can let retirees avoid selling stocks during a decline.
- A withdrawal and spending plan helps manage the timing risk that a fixed return average hides.
Related
More from our team
Turn insight into a plan
The first conversation is 30 minutes, no preparation needed.