One of the unique issues that you're going to face when you retire is something called sequence of return risk.

Most people, they're unaware of how risky this actually is because it doesn't become an issue until you actually start living off your portfolio, which for most people isn't until you retire.

So in today's episode of Ready for Retirement, I'm going to tell you what you need to know about this unique retirement risk, and I'm going to give you three things you can do to protect against it, and it's all coming up next on Ready for Retirement.

This is another episode of Ready for Retirement. I'm your host, James Connell, and I'm here to

teach you how to get the most of the life with your money. And now, on to the episode.

Today's episode is based upon a question that comes from a listener named Ben. Ben says this,

Hi, James, I've been enjoying your YouTube videos and I have particularly been watching the ones

where you have a case study from actual clients with names changed. In many of them, you show

graphs using a static market return

assumption to illustrate a projection of the portfolio balance over the retirement horizon.

My question, which I hope you can answer in a video sometimes, is how your planning process

addresses the concept of sequence of return risk, which is particularly important for those

wanting to retire earlier than normal retirees.

Thanks for the educational material you publish, Ben.

Ben, thank you very much for that question.

I think you're exactly right.

And so for those of you who are wondering what's been referring to, check out our YouTube channel on that we do a lot of case studies.

And in these case studies, what we do is we will project out actual client scenarios.

And we might say this person wants to retire.

They are invested in a moderate portfolio. Let's just assume there's a growth rate of, say,

6% in that portfolio. And they're spending down their portfolio to the tune of maybe 4% per year or so.

Well, it doesn't take a rocket scientist to do some basic math that says, okay, if I'm growing at 6% per year and I'm taking out 4% per year, then this software, at least initially, is going to model the portfolio continuing to grow.

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