117. Managing Sequence of Return Risk

Aug 17, 2022

What is Sequence of Return Risk?

We began the discussion on sequence of return risk on our last podcast and we want to continue addressing some key components to this risk. Not understanding how this impacts your portfolio can present a real threat to your retirement. 

In this part of our discussion, we’ll explore the four general spending and investing techniques for managing sequence of returns risk that Dr. Wade Pfau talks about. Plus, we’ll run through the Four L’s (longevity, lifestyle, liquidity, and legacy) that impact the retirement planning process and impact risk. This is a vital discussion that you need to have with your financial advisor and it’s part of our Redefining Wealth Process® that protects retirees throughout all of their retirement. 

This episode will also feature a bonus conversation on the Inflation Reduction Act of 2022 and a few of the items that aren’t getting enough attention, including the $74 billion stock tax. 

Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/

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Timestamps (show notes):

3:25 – Defining sequence risk  

8:57 – Spending conservatively 

11:48 – Laddering bonds into your portfolio 

13:36 – Reducing volatility when it matters most 

17:10 – The Four L’s 

21:24 – Funded ratio

25:28 – Present value of assets vs liabilities

26:24 – Bonus discussion: Inflation Reduction Act

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