Due to the increasing political and market uncertainty, and recent stock market correction, we felt it was more important than ever to reintroduce this episode of the Retired·ish Podcast throwing it back to episode #8!

In this episode we defined the downside of what is called Sequence of Returns Risk - which is in my opinion can be the greatest threat to your retirement savings and income.

This risk can present itself when markets happen to be volatile to the downside at nearly the same time that you enter retirement when you go from saving to spending your retirement nest-egg – which can be a very nerve-wracking experience to go through.

We explained why it is crucial to understand that saving for retirement is actually the easy part, and how spending what you’ve saved up in your investment portfolio can quickly become a risky endeavor, especially if you have no strategy to mitigate the downside of Sequence of Returns Risk.

More specifically, I discuss:

• What is the greatest threat to your retirement savings?
• Examples of sequence of returns risk in the savings phase of your life
• Examples of sequence of returns risk in the spending phase of your life
• The difference between monitoring account balances vs. average investment returns
• What types of strategies can you implement to try and reduce sequence of returns risk

Resources From The Episode:

• Retired-ish Newsletter Sign-Up
• Get Show Notes Here

 

Key moments:

(05:23) "Sequence of Returns Risk": Retirement's Hidden Threat (08:06) When The Sequence of Returns is Irrelevant (10:34) Impact of Return Sequence When Spending in Retirement (20:51) Emotion-Free Investment Strategy (23:09) Short-Term Retirement Fund Strategy (26:11) Investment Growth and Legacy Strategy