The order of your market years can make or break a retirement.
Meet two hypothetical neighbors near Sun City Summerlin. They start with the same savings, take the same income each year, and live through the very same set of market years, with the exact same average return. The only difference is the order the good and bad years arrive. Move the sliders and watch what happens.
Line chart comparing two retirement balances over 25 years.
This risk can be planned for.
The free 5-question guide walks through plain-English ways to help protect the money you draw from in those early years. Enter your email and it is yours in one click.
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Read your guide nowWhy the same returns end so differently
Both neighbors earned the identical average return over 25 years. But Linda met her losing years early, while she was already pulling income out. Selling from a shrinking balance in those first years left less money to recover when the good years finally came. Robert met the same losses near the end, after years of growth had built a cushion.
This is called sequence of returns risk. A downturn in the first several years of retirement, while you are taking income, can do damage that later gains may never fully undo. It is one of the biggest reasons two people with similar savings can have very different retirements.
The good news is that it can be planned for. Protecting the money you draw from in those early years is one way to take this risk off the table. My free guide walks through the options in plain English, and you are welcome to talk it through with me directly.
More free help: try the 2-minute readiness scorecard, see when to claim Social Security and common questions.
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- How to pursue growth while helping protect your principal
- The truth about CDs and inflation
- How to build income that lasts for life
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