Sequence risk: why the first 5 years matter most

5 chapters·16 min·action plan·mastery check

Chapter 1 of 5

The idea

Two retirees get the same average return. One runs out of money. The other dies rich.

Order matters

When you're withdrawing, a crash early forces you to sell more units at low prices, and those units never recover for you. The same crash late in retirement barely matters. That's sequence-of-returns risk.

Predict first

Two retirees get the same average return over 20 years, but one gets a crash in year 1 and the other in year 20. Who runs out first?

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