COULD YOUR WITHDRAWAL STRATEGY
HURT YOUR RETIREMENT?
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Tyler Cunningham,
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Tessa Hall
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About This Episode
Could your retirement withdrawal strategy have a greater impact than your investment returns?
In this episode of Healthy, Wealthy & Wise, Tessa Hall speaks with BWFA Financial Planner Tyler Cunningham about sequence of returns risk and why the timing of withdrawals can significantly influence retirement outcomes. Although two retirees may earn the same average rate of return, the order in which those returns occur can produce very different long-term results.
Tyler explains why creating cash reserves, strategically structuring retirement income, and understanding distribution options can help reduce unnecessary risk. He also discusses when rolling assets from an employer-sponsored retirement plan to an IRA may provide greater flexibility for managing retirement income.
To learn more about BWFA’s Financial Planning services, visit our Financial Planning page.
Read Full Description
Two retirees can have nearly identical portfolios and earn the same average rate of return. Yet one may reach a very different financial outcome than the other. One reason is sequence of returns risk, which refers to the order in which investment gains and losses occur after retirement.
In this episode of Healthy, Wealthy & Wise, Tessa Hall speaks with BWFA Financial Planner Tyler Cunningham about why withdrawal timing matters. Tyler explains how taking retirement distributions during a market decline can permanently reduce a portfolio’s value. He also discusses why preparing before retirement is just as important as selecting the right investments.
The conversation explores practical strategies that may help reduce sequence of returns risk. Tyler explains why maintaining cash reserves or fixed income investments can help retirees avoid selling investments during market downturns. He also discusses how creating separate income “buckets” may improve long-term retirement outcomes.
The episode also examines the differences between employer-sponsored retirement plans and IRAs. Tyler explains why IRAs often provide greater flexibility when selecting which investments to sell for retirement income. In addition, he discusses common withdrawal mistakes and why distribution planning should consider both investment performance and taxes.