Latest / The Financial Freedom Podcast with Fexingo: Quitting Your Job, Living Off Investments, Independence
The Sequence Risk That Breaks Early Retirement
In this episode, Lucas and Luna dive into sequence-of-returns risk—the early-retirement killer that can derail even the best-laid plans. Using a concrete example of a retiree with a $1.5 million portfolio who faced a 20% market drop in year one, they explain why withdrawal timing matters more than long-term average returns. Lucas breaks down the math: a 4% withdrawal rate becomes 5% after a decline, and if that compounds over a decade, the portfolio fails 40% of the time. They discuss strategies to mitigate this risk, including having two years of cash reserves, a flexible withdrawal policy…
The skinny
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