It will be folly to assume it’s all bed of roses when it comes to investment return during your retirement. Again, the most crucial thing is how to manage your investment loss intelligently so that your other financial goals are kept as intact as possible.
Having said that, the order of occurence this investment loss matters a lot. The impact is very substantial at the start of your retirement, while it is somehow “softer” late into your retirement landscape.
Let me rephrase this to highlight its importance.
It matters A LOT how your investment performs in the first few years of your retirement. It is known as the sequence of return problems and best illustrated by an example below.
Traditional retirement model DON’T consider this. Real world retirement planning must address this problem, so Retire Method aims to accomplish this.
Sequence of return can dramatically impact how much you can safely spend from your savings.
Same compound return percentages, different sequence of returns, vastly different results.
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