Understanding the Dangers of Sequence of Returns
When determining a strategy for withdrawing retirement savings, many people assume that if they don’t withdraw any more than their average annual investment returns, their money will last them comfortably throughout retirement. However, this is not always the case.
Taking a stream of income during a bear market can have disastrous results on your ability to maintain income for the next 20-30 years without running out of money. This risk is called sequence of returns. When you begin your retirement income is as important as how much that income amount will be. This is especially important, considering the bull market many of us have enjoyed the last few years and the uncertainty facing us today.
The PDF on the right provides a more thorough explanation of the Sequence of Returns Risk with supporting graphics to better help you understand the dangers of taking retirement income at the wrong time.
Feel free to contact us if you would like more information on how with mitigate the risk of sequence of returns.