Putting Your Nest Egg in 3 Baskets

This week, Craig Siminski, of CMS Retirement Income Planning, shares an article  showing how understanding sequence-of-returns risk could help you develop a three-prong distribution strategy for retirement:

“You can’t time the market” is an old maxim, but you also might say, “You can’t always time retirement.” Only 46% of current retirees say they retired when planned, while 48% retired earlier than expected.

Taken together, these two uncertainty factors suggest that it would be wise to prepare for the possibility that you might retire during a market downturn. You’re fortunate if you retire during a market upswing.

Sequence Risk

The risk of experiencing poor investment performance at the wrong time is called sequence risk or sequence-of-returns risk. All investments are subject to market fluctuation, risk, and loss of principal — and you can expect the market to rise and fall throughout your retirement.

However, market losses on the front end of retirement could have an outsize effect on the…

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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 22 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

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