Strategies for Managing Sequence of Return Risk

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Michael E. Kitces, MSFS, MTAX, CFP®, CLU, ChFC, RHU, REBC, CASL

For long-term investors, the reality is that even if markets are volatile for a period of time, as long as the portfolio stays invested, returns can average out in the long run. In the case of retirees, however, ongoing spending withdrawals introduce the possibility that if the portfolio experiences weak returns early on, it could be depleted entirely before the good returns finally show up. As a result, retirees must consider this “sequence of returns” risk when planning for retirement, and strategies to manage it, from reducing spending in the first place, to engaging in more dynamic asset allocation to reduce risk exposure, or dynamic spending strategies to adapt spending withdrawals to market changes along the way!

In this session you will learn to:

  • Understand what sequence of return risk is and how it affects a retirement portfolio
  • Know the origin of the “safe withdrawal rate” and how to apply it in today’s low-return environment
  • Compare different types of dynamic asset allocation strategies and ways to create spending “floors” for retirees
  • Apply dynamic spending strategies with clients and understand how to set the parameters for retirees to manage along the way


SAVE MY SEAT

 

Hosted by:
Marshall Heitzman, CFP®, ChFC, FLMI, CPCU, BFA™
VP - Advanced Planning Consultant

 

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Join us for a conversation with Michael Kitces

  • Date: Wednesday, May 18, 2022
  • Start Time: 1:00 PM CT / 2:00 PM ET
  • Duration: 60 minutes

SAVE MY SEAT

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