Sequence of Returns

[pb4uski]

....I haven't given a lot of thought to what I would do if faced with an extreme down market and a rapidly dwindling portfolio...would I take SS early to protect my remaining assets or delay SS and continue to spend down?...

+1 but if it happened we could tighten our belt on expenses, invoke my pension, or in a couple years, start SS earlier than we planned. As Teddy Kennedy would have said, I'll drive off that bridge when I get to it.

 

[daylatedollarshort]

If you have low expenses going into retirement you will also minimize sequence of returns issues. This is where the old chestnut if paying off the mortgage works in your favour.

I agree on the low expenses, especially low fixed expenses. I'm not so sure about paying off the mortgage, since money used to pay down a mortgage lowers asset income. There are always interesting pro and con threads here on the mortgage payoff topic.

I do think the value of low overheard sometimes tends to be underrated as a retirement factor compared to portfolio returns. The strategy at our house is to invest pretty conservatively and live well below our SS, pension and asset income in retirement and not have to worry too much about sequence of returns.