Episode 7: The Biggest Financial Risk in Early Retirement

You can do everything right — save enough, invest consistently, retire on schedule — and still run out of money. The reason isn't bad investing. It's bad timing. And it's one of the least-talked-about risks in retirement planning.

In this episode, I explain sequence of returns risk: what it is, why the early years of retirement are so critical, and what you can do before you retire to protect against it.

In this episode:

▸ What sequence of returns risk actually means

▸ Why a market downturn in year one of retirement is far more dangerous than one in year fifteen

▸ The math that shows why this matters so much

▸ Strategies to reduce your exposure before and during early retirement

A 30% market drop in year one of retirement, combined with ongoing withdrawals, can permanently impair a portfolio in ways that a identical drop in year fifteen simply cannot. The math is unforgiving: when you're selling shares to cover living expenses during a downturn, you're locking in losses and reducing the number of shares left to recover. The good news is that sequence of returns risk is manageable if you address it before you retire, not after the fact. Bucketing strategies, income floor planning, and thoughtful asset allocation in the transition years are specifically designed to absorb early volatility without derailing your income plan.

Episode 7 of the Retirement Transition Series — 12 short episodes for people who are 5–10 years from retirement.

▶ Next: Episode 8 — How Your Portfolio Should Change Before Retirement

▶ Watch Episode 6 → Should You Do Roth Conversions Before Retirement?

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