Sequence of returns risk is the name for what happens when people draw down their investment accounts early in retirement, when the market is in a downturn, as it is now. This involves cashing out stocks at their lows, giving you less money to work with, when the market eventually rallies again. In addition, you’ve locked in losses, which means selling at a loss, rather than giving your investments time to rebound. Here are some ways to avoid that kind of damage to your retirement investments, which can impact your spending power (in a bad way) for the rest of your life.
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