Retirement Isn't Just About How Much You Save. It's About When.

You can do everything right on paper — save diligently, spend reasonably, stay invested for the long haul — and still land in a very different retirement than someone who did the same things.

The difference often comes down to a factor many retirement checklists leave out entirely: timing.

A lot of advice fixates on a single number: the balance. Have I saved enough? It's an important question. But it assumes that two people who arrive at the same number will experience the same retirement. In reality, the moment you stop adding to your savings and start drawing from them, a new force enters the picture. And it doesn't treat everyone equally.

Same Numbers, Different Outcomes

Picture two people who retire with nearly identical savings. They spend about the same each year. Over the long run, their investments earn similar average returns. It would be reasonable to expect them to end up in roughly the same place.

They often don't.

The reason is something financial professionals call sequence-of-returns risk. When you're withdrawing money, the order in which good and bad years arrive starts to matter as much as the average.¹ A market decline early in retirement forces you to sell investments at lower prices, leaving fewer shares invested to benefit if the market recovers. The same downturn a decade later, after years of growth, tends to land much softer.

Same savings. Same average return. Different order of events. Different retirement.

Meet the Retirement Red Zone

There's a name for the window where this matters most. Some professionals call it the fragile decade, roughly the five years before and the five years after you retire.²

Borrow a term from football and it clicks into place: the red zone. It's the stretch where the biggest plays happen and small mistakes carry outsized consequences. Retirement has its own version. In the years right around your last day of work, you're making a delicate handoff of your financial life, shifting from building your savings to leaning on them. A downturn during that transition can make the shift harder to manage.

Before it, you're still accumulating. After it, you're drawing down. The narrow band in between is where timing has the loudest voice.

A Tale of Two Retirees

History offers a useful illustration. Consider someone who retired in the mid-1990s and enjoyed several strong market years before the dot-com decline arrived. Then consider someone who retired right as that decline hit, and had to begin drawing down almost immediately.

Even with similar savings, the second retiree likely faced tougher questions much sooner — about how much to spend, when to sell, and how to adjust.*

The savings looked the same on paper. The timing did not.

*Hypothetical example for illustrative purposes only. Actual results depend on investment returns, withdrawals, fees, inflation, and other factors.

The Sequence Is Luck. Your Response Isn't.

You don't get to choose which market you retire into. That's luck, and no amount of planning changes it.

What you can shape is how prepared your plan is to absorb whatever timing hands you. A few approaches worth exploring:

• Keeping cash reserves for near-term spending can help reduce the need to sell investments right after a downturn.
• Flexible withdrawals can help give you room to ease back in leaner years rather than locking into a fixed number.
• A thoughtfully balanced investment mix and dependable income sources may help a plan respond more gracefully when markets turn.

Already retired? These same levers can still give your strategy more room to adapt. The Red Zone doesn't close behind you. Staying responsive matters just as much on the far side of it.

Preparation Over Prediction

No one can reliably predict what markets will do in the years around your retirement. The encouraging news is that you don't have to.

The aim is a plan flexible enough that being wrong doesn't derail you, prepared for a range of possibilities rather than betting on a single forecast. That's a very different, and far more achievable, kind of confidence.

Where you should focus next depends on your full picture: your timeline, your income sources, how much flexibility you've already built in. A financial professional earns their keep here as a thinking partner who can pressure-test your plan against a range of scenarios before you need the answers. You don't have to figure it out on your own.

 

Sources:

Morningstar, 2025 [URL: https://www.morningstar.com/retirement/how-avoid-outliving-your-retirement-savings-its-all-sequence]

Kiplinger, 2024 [URL: https://www.kiplinger.com/retirement/in-retirement-planning-consider-the-entire-journey]
 

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