Latest / The Financial Freedom Podcast with Fexingo: Quitting Your Job, Living Off Investments, Independence
How Early Retirees Can Reduce Sequence Risk With a Cash Buffer
In this episode, Lucas and Luna explore how maintaining a dedicated cash buffer — rather than selling investments during market downturns — can dramatically reduce sequence-of-returns risk for early retirees. They break down the mechanics using a concrete example: a retiree with a $1 million portfolio who keeps two years of expenses in cash. They explain how this strategy works during a bear market like 2022, when selling stocks would have locked in losses, but drawing from cash allows the portfolio to recover. Lucas cites research from Wade Pfau and the Trinity study showing that a cash…
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