Retire With Purpose - The Retirement Podcast 511: Sequence Risk Meets RMDs: The Retirement Trap No One Talks About
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Jul 18, 2025 Are your Required Minimum Distributions (RMDs) a ticking time bomb for your retirement? Discover how RMDs and sequence of returns risk intertwine, potentially jeopardizing financial security. Explore strategies to optimize withdrawals during market shifts, including the value of timely Roth conversions. Learn why asset allocation and withdrawal timing are crucial in mitigating financial fallout. With expert insights, navigate the complexities of RMDs to safeguard your retirement income and maintain peace of mind.
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Sequence of Returns Risk Explained
- Sequence of returns risk means taking withdrawals during market downturns harms portfolio recovery.
- This violates the investment principle to buy low and sell high, worsening retirement outcomes.
Sequence Risk Persists Post-RMD Age
- Sequence risk usually lessens by RMD age but does not disappear because distributions continue for decades.
- Severe market drops early in RMD years still pose significant risk despite typical mild negative returns.
Strategize RMD Timing and Amounts
- Take RMDs strategically throughout the year instead of a lump sum to self-regulate withdrawal risk.
- Adjust withdrawals based on account value fluctuations to avoid forced high distributions in bad market years.
