PFR Nation,
As you approach retirement, or even when you are in the beginning phase of retirement, there is this natural feeling of concern about market uncertainty. After all, the market can turn south in a heartbeat, potentially even leading into a recession. Or worse, a prolonged recession. This term is also known as “Sequence of Returns Risk.” It’s not about your long-term average return, it’s about the ‘sequence’ those returns are generated.
I’ve been stress testing different rates of withdrawal with different starting periods. And the ‘Lost Decade’ of the 2000s is a perfect example of why sequence of returns is so important for retirees to protect against.
In this episode, I’ll highlight some of the major downturns since the 2000s. Then, I’ll talk about some real strategies that you can implement as you protect against sequence of returns risk. I hope you find this one useful!
And let me know what YOU plan to do to hedge against this risk. Also, make sure to share this episode with someone who is also approaching retirement, or who has recently retired! I’m sure they’ll also find it useful.
Thanks for tuning in.
Kevin
Key Topics:
• What Sequence of Returns Risk really means and why it matters more than long-term average returns.
• How the “Lost Decade” of the 2000s demonstrates the dangers of poor return sequencing.
• Practical strategies to protect your retirement portfolio from early losses.
• Tips for stress-testing withdrawal rates and planning for different market scenarios.
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This is for general education purposes only and should not be considered as tax, legal or investment advice.