Why When You Retire Can Matter More Than How Much You Saved

Most people think retirement success hinges solely on how much they save. But there’s a lesser-known risk that can quietly erode even a well-funded portfolio: sequence of returns risk.

1. The Market Doesn’t Care About Your Retirement Date

If the market dips early in your retirement—right when you begin drawing income—those losses can compound. The problem isn’t that the market fails over the long term, but that you’re forced to withdraw while prices are down, locking in losses.

2. The Same Average Returns Can Produce Different Outcomes

Two retirees with identical savings and the same average annual returns can end up with dramatically different results—simply because of the order in which returns occur. The sequence, not just the average, shapes your financial outcome.

3. Early Losses Hurt More

Withdrawing during a downturn means selling more shares to maintain your income. This reduces your base for future growth, making early losses especially dangerous in the first 5–10 years of retirement.

4. Withdrawal Strategy Is Just as Important as Accumulation

A thoughtful drawdown plan—using buckets, guardrails, or dynamic spending—can help mitigate sequence risk and protect your long-term wealth. How you take money out matters as much as how you put it in.

Stat:
A retiree in 2000 withdrawing 4% annually could run out of money by year 25, despite average annual returns near 6%. Sequence mattered more than average returns.

Takeaway

Sequence of returns risk isn’t about how the market performs—it’s about when. A solid withdrawal strategy can turn uncertainty into resilience.

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