The Sequence of Returns Risk in Retirement

 

From: Wade Pfau

The order of market returns matters.

Market returns just before and after retirement have a disproportionate impact on our lifetime financial success. This is known as sequence of returns risk and it is one of the key reasons that market volatility around the retirement date impacts individuals more dramatically.

From: the Retirement Planning Guidebook

Related: Time in the Market, Not Timing the Market