Weekend Reading: The Biggest Mistake Retirees Make
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Just like unexpected detours during a road trip can lead to increased expenses, the combination of market volatility and withdrawing money from your investment accounts can lead to sequence of returns risk. According to the authors, neglecting to plan for this risk is the one of the biggest mistakes retirees can make.
Since we can’t predict future market returns, careful planning and diversification is vital. One useful planning strategy is the bucket approach, in which retirement savings are divided into different "buckets" based on time horizons.
READ THE ARTICLEKey takeaway: Remember the saying that you shouldn’t put all of your eggs into one basket? The same is true for your retirement savings, and careful planning with your advisor can help to manage risk.