Many different factors drive the retirement decision and when to retire. To name a few I’ve seen in the last 2 years:
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- Health or Spouses’ Health
- Age
- Job Issues
- Social Security
- Enough Money
- Layoffs
- Covid
- Marriage
I have heard several stories of people running out of money or running short of money in retirement. Some of those instances have been blamed on large market downturn’s which have led to something called “sequence of returns” risk.
This recent CNBC article may help you to better understand the potential risk. Why 2022 has been a dangerous time to retire – and what you can do about it
This can happen when you start receiving distributions from your account and the market is declining at the same time. The risk is most severe in the years immediately after retirement begins. If losses occur at the beginning of retirement, it can put tremendous stress on the ability to maintain income distributions for the remaining lifetime.
With proper planning there are ways to avoid much of the sequence of returns risk and enjoy regular income throughout retirement. There are options that remove sequence of returns risk that should be considered.
Sometimes the reason for retirement seems to be out of your control. Other times we’re able to carefully plan the timing and anticipate the event. There are many good reasons to retire and pursue your heart’s desire and find great satisfaction in your 2ndHalf. I want that for each of you!
Whenever retirement happens it’s my hope that we help to have you financially and emotionally prepared. If we haven’t dealt with the possibility of sequence of returns risk in your plans, let’s talk soon and decide what’s best for your situation.
If you’re unable to retrieve this article, let us know and we’ll send you a copy.
