
Ask Paula: The stock market is down - Can I still retire?
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How to Manage Sequence of Returns Risk
Bella, thank you so much for calling in with that question. What you are essentially asking about is something called sequence of returns risk. A drop in your portfolio at the beginning of your retirement can be worse than one 15 or 20 years later. In order to manage that risk, what many retiries do is d risk and then re risk. It sounds counter intuitive because we often think of time line and risk as having a linear relationship. As time line shortens, risk should also shorten.
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