You Can Average 10% Returns (or more) & Still Run Out of Money in Retirement

(don’t forget to checkout the video of this blog too)

One of the biggest risks retirees face as they enter retirement is an early investment loss.

This means that the market takes a dip right as you start taking retirement income out of your portfolio.

This is a big reason the 4% rule exists in the first place (which states that you shouldn’t take more than 4% a year from your portfolio).

4% is a mathematically low enough withdrawal rate that you aren’t taking on TOO MUCH risk of running out of money in retirement (due to unexpected market volatility).

Although, ANY risk of running out of money is too much (in my opinion).

This risk is often referred to as the sequence-of-return risk, which really means that your average returns don’t matter once you start taking income out of a portfolio.

In fact, you can average 10% (or much more) in retirement and still run out of money!

This is the case if the market plummets either in the first few years leading up to retirement, or in your first few years of retirement.

This puts you in a position where you are chasing higher returns, playing catch-up to try to make up those losses in your portfolio (so that you have a large enough nest egg to support income payments throughout retirement).

In a lot of cases, this can cause a portfolio to fail… or no longer have enough money to support the retirement income need.

Imagine if this was you and your retirement!

That’s why it’s so important to leverage an insurance company to create an element of guaranteed income in your retirement plan.

Not only are you able to more efficiently generate income (having eliminated the sequence-of-return)…

But you also have an ironclad guarantee that you have income that will last for life (no matter how long you live).

So like I’ve mentioned before, the market is GREAT for accumulation of wealth and for growth..

But it is NOT good once you start pulling income from a portfolio.

Let’s chat 💬😎