We are in Houston this weekend visiting Susan’s Mom and sister. We are staying with Susan’s Mom. She lives in a beautiful senior independent living facility. It is quite interesting and a wake-up call to be around so many folks who are 15-25 years older than I. Susan and I discussed this at breakfast and I thought I would write about it.
Archives for July 2015
I hope that most baby boomers who are close to retirement have developed a fundamental understanding of the “sequence of returns” risk as it applies to their retirement security. In a nutshell, the sequence of returns risk tells us that the annual returns on our retirement investments do not by themselves determine whether our retirement nest egg will support us until we die. Rather, we must also carefully consider when those returns occur. For example, a significant market downturn at the commencement of our retirement – say at age 65 – is much more dangerous than if the same downturn occurs ten years later, at age 75. Let’s think more about this for a minute.