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How to Handle Sequence Risk With a Bond Tent Strategy
Episode 103 of The Financial Freedom Podcast explores how early retirees can protect their portfolios from sequence-of-returns risk using a bond tent strategy. Lucas and Luna break down the concept, using a concrete example of a retiree with a $1 million portfolio who shifts from a 60/40 stock-bond split to a 50/50 allocation just before retirement, then gradually returns to 70/30 over the first five years. They explain why this approach reduces the chance of selling stocks during a downturn, citing research from Wade Pfau and Michael Kitces. The hosts also discuss practical considerations…
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