I just don't buy reducing your equity exposure and then ramping back in as the fix for sequence of returns risk in all cases.
Why is it that once you've been retired for a few years you're no longer at such a risk of a downturn? Is it because you have fewer years left?
Well, what if you returned very early, like some here did? I was still in my late 40s. If I was lighter in the market these last few years I wouldn't have gotten as much as benefit from it, and once I am fully invested in my mid/late 50s a deep and prolonged downturn would put me at a lot of risk, I'd think.
1966, mentioned earlier, is probably a case where starting with lower equities and increasing them over a few years would work better than the more standard AA of 110-age, or whatever AA you want to use. But what if you had retired 8 years younger in 1958? I haven't run the numbers but would that really have worked to have reduced equities for 8 years and then start getting whacked once fully invested? Maybe it still would've worked then, but it's no guarantee it'd work for some future realistic scenario.
