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What Is Sequence Risk?

January 18, 2020

What the heck is sequence risk? Sequence risk is the risk to any retiree that when you are withdrawing money out of your accounts whether it’s for IRS mandatory RMD’s or just your own retirement withdrawals that the stock market is down at the same time. Double whammy. Double negative. Perhaps triple-negative if you add in fees and expenses to these investments. We don’t want that and we want to try to eliminate that or keep that from happening as much as possible in our clients’ portfolios.

So this is something that is hardly ever talked about when it comes to financial professionals, their clients, and their planning. What’s talked about more so is the accumulation and growth of your funds. Sure, that’s important but, we need to talk about distribution and how that affects your whole retirement picture. Especially, when the market is down.

When the market is up everybody is happy, everything is good. If the market is up it doesn’t matter so much, but when the market is down and you’re also withdrawing money out at the same time that can really crush the values of your investments and we need to be aware of that.

So I feel like we do a good job of teaching our clients and educating our clients about this risk that very few people talk about. So if you want to learn more about sequence risk and how it impacts your retirement just give us a call. Email us or give us a call to learn more and schedule your own complimentary consultation.