Sequence of Returns Risk: The $1,000,000+ Timing Risk in Retirement

November 30, 2022

The timing of when you begin to draw income from retirement accounts, not necessarily average returns, can be worth millions in retirement and the difference between having enough or running out of money. 

If you start to draw income during a down market, you run the chance of running out of money, but if you’re more fortunate and start retirement account withdrawals during an up market, it could mean you end up with a few million more and have what you need. 

With inflation at a 40-year high, it is crucial for investors to understand this hidden risk, and how to manage it. 

Sequence of returns risk is the risk around timing, not necessarily the average. When do those good and bad years occur? This is incredibly impactful when you look at how much income you get to take in retirement as well as how much you get to leave behind. 

This isn’t something you just get to retirement and flip a switch to plan for. There are ways to substantially decrease this risk leading up to retirement, and we’re here to help. 

Typically, the best way to manage sequence risk is to deploy a variety of asset classes, not just stocks and bonds, but a collection of different asset classes. This is where retail investors are somewhat limited, and the correct combination depends personally on your situation, so click the link below to schedule a complimentary consultation with one of our advisors and learn more about how our comprehensive service can help you. 

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