How the sequence of returns risk can be a spoiler for your retirement

Sequence of returns risk is the danger that negative market returns early in retirement, combined with regular withdrawals, can quickly deplete your retirement savings-even if the average return over time is positive. This risk is especially pronounced in the first five to ten years of retirement, as poor early returns mean you withdraw from a shrinking portfolio, reducing its ability to recover when markets improve. As a result, even retirees with similar average returns can experience very different outcomes depending on the timing of those returns, making careful planning essential to avoid running out of money in retirement