The theme this week on the Retirement Quick Tips Podcast is: Inflation is sticking around…now what? 

Today, I’m talking about why you shouldn’t retire until the recovery is well underway.

I don’t recommend retiring until the stock market has bottomed and we’re a few months into the recovery…that’s probably looking like mid/late 2023 at the earliest if you were planning to retire this year. 

If you must leave your current work situation before the recovery is well underway, then I would make sure you have more than enough income to live comfortably, even if your heating costs, gas prices, and grocery bills remain high. 

Or work part time so you don’t need to withdraw anything from your portfolio.

That’s the key - to avoid withdrawals on your portfolio in the early years of retirement if the stock market is still declining. You make the downturn in your portfolio much worse and significantly increase the likelihood that you’ll run out of money in retirement if your portfolio takes a big hit in the early years of retirement.

This risk is not well-understood, but it’s worth looking into. It’s called the sequence of returns risk and it’s why a downturn in the early years of retirement is so much riskier for your long-term financial health compared to the same downturn 10 or 15 years into retirement. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.  

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