10-6-26 Sequence of Returns Risk - The Math That Breaks Retirement

You can earn a solid average return in retirement and still run out of money. The reason may be sequence of returns risk — the danger of suffering significant market losses early in retirement, while simultaneously withdrawing money from your portfolio.

Lance Roberts & Jon Penn explain why the order of investment returns matters so much once you transition from saving to spending, and examine the math behind the 4% withdrawal rule, why early retirement losses can be so difficult to recover from, how taxes can increase the effective draw on a portfolio, and why starting market valuations matter.

The goal isn't to predict the next bear market.

It's to build a retirement plan that can withstand one.

0:00 - INTRO

1:01 - ISM Report & Economy Activity Remain Robust

2:47 - Earnings Expectations & Whisper Numbers: Plenty of Room for Disappointment

4:09 - Why We Rebalanced on Monday

5:44 - We're on the Cusp of a Breakout to new, all-time highs

7:33 - Oil Prices & Interest Rates

10:35 - Metallica, Wiggles, & How Far Could Kids Go

16:40 - Sequence of returns math (risk): What it is