Sequence of Returns Risk

You know about the many different types of risk that investors face but there’s one that might have a big impact on whether you run out of money in retirement that you might not know about. 

What we want to focus on during this episode of the podcast is sequence of return risk, which refers to the uncertainty of the order in which you’ll get returns. The reason most people aren’t aware of this risk is that it doesn’t really impact us while we’re working so there aren’t many conversations about it. 

But this is something we talk about with clients quite a bit because it can have a significant impact on a retiree’s security so let’s dive into the details on this episode.

Listen to this week’s show to learn more about:

• Why this impacts people in retirement much more than it does people while they’re working. (2:11)
• A story to explain how the order of returns for two different people would impact their retirement. (3:29)
• The things you should be doing in the 5-10 years before you retire (7:32)
• The key points you need to pay attention to in order to address this risk. (11:47)
• What type of cash reserve or emergency fund should you have set aside? (12:53)

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