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4% withdrawal rule risks vary with market timing; early losses can halve retirement savings.

Market News
29 May 2026
247 Wallst
View Source
Neutral
pluang ai news

A retiree with a $2.4 million portfolio following the 4% withdrawal rule faces significant sequence-of-returns risk. Early market downturns, like the 2000-2002 dot-com crash, can drastically reduce portfolio value despite average returns of 7%. Strategies to mitigate this include maintaining a 2-3 year cash reserve, reducing withdrawals after large losses, using annuities for longevity income, and adjusting equity exposure over time. These steps help protect retirement savings from early market shocks and inflation impacts.

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