Advisors explain why ‘timing is everything’ and especially when it comes to retirement

Article Summary

• Sequence risk (timing risk) matters more than average returns: Two portfolios with identical average returns can have very different outcomes depending on when gains and losses occur—especially during withdrawal phases.
• Biggest danger is early losses during withdrawals: If negative returns happen at the start of retirement (or when drawing income), investors may be forced to sell assets at a loss, permanently reducing portfolio longevity.
• Frequency + sequence amplify risk together: It’s not just one bad year—multiple downturns early on (frequency) combined with poor timing (sequence) significantly increase the chance of depleting assets.
• Mitigation requires flexibility and structure: Strategies like lower or dynamic withdrawals, cash buffers, diversification, and guaranteed income streams help reduce the impact of bad return sequences.