James explores the concept of sequence of return risk in retirement planning. Most people are unaware of how risky this is, as it doesn’t become an issue until you begin living off your portfolio.

Responding to a listener’s inquiry about early retirement, James dives into the potential impact of market timing on retirement outcomes.

Learn three actionable strategies:

Ensure a reasonable initial withdrawal rate.
Implement a suitable withdrawal strategy.
Own a diversified mix of assets.

Questions Answered:

How does sequence of return risk impact retirement outcomes?

How can early retirees protect against sequence of return risk?

Timestamps:
0:00 - Ben’s question
3:19 - Sequence of returns matters
6:48 - 3 projections to consider
11:49 - The 4% rule
16:05 - Considerations for early retirees
18:57 - 3 protective takeaways
22:15 - Summary

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3 Ways to Protect Against Sequence of Return Risk in Retirement