Sequence of Returns Risk

Wade Pfau, Ph.D., CFA

by Wade Pfau, Ph.D., CFA

December 30, 2015

Sequence of Returns describes the risk that a new retiree has of needing to draw from their accumulated retirement portfolios under poor market conditions. This means that the retiree will be forced to spend a larger portion of their total portfolio than anticipated, and leads to lower long term total returns.