Dustin Javier, CFP® · Defined Capital
The Retirement Window
Many people think retirement success comes down to one question: Have I saved enough?
It's an important question. It's not the only one.
Two people with nearly identical savings, spending habits, and investment returns can experience very different retirements.
One enjoys decades of financial confidence.
The other faces difficult decisions much sooner.
But how can two retirement plans that look so similar end up so far apart?
The answer begins with something referred to as the Retirement Window.
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The 10 Years That Help Shape the Rest of Your Retirement
The Retirement Paradox
At first glance, it doesn't seem to make sense. If two people earn similar savings and investment returns, shouldn't they end up in roughly the same place?
Not necessarily.
When withdrawals are involved, losses early in retirement can have a greater effect than losses that arrive later. Selling investments after a decline leaves fewer shares available to participate if the market recovers.1
Same savings. Same average return. Different outcomes.
Why the Window Is Different
Financial professionals sometimes refer to the five years before and after retirement as the fragile decade.2
You can also think of it as the Retirement Window.
Just like in football, the red zone is where the biggest plays happen. The years surrounding retirement can have an outsized impact on what comes next.
Before retirement, you're still building your savings. After retirement, you begin relying on them.
A market downturn during that transition can make the shift more challenging.
History Has Already Shown Us
History offers real-world examples of how timing can shape retirement.
Someone who retired in 1995 enjoyed several years of strong market growth before the dot-com crash.
Someone who retired in 2000 faced major market declines almost immediately.
Even with similar savings, the second retiree likely faced more difficult decisions about spending and withdrawals. It is called Sequence of Returns Risk. Investors can be most vulnerable to this risk when a series of negative returns occur in the years just before and after retirement begins and when then they start withdrawing funds at the same time the portfolio value is declining.*
*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.
But you have more control than you might think.
Keeping cash reserves for near-term spending can help reduce the need to sell investments after a downturn.
Flexible withdrawals, a thoughtfully balanced investment mix, and dependable income sources can also help your retirement plan weather market volatility.
Already retired? These same levers may still give your strategy more room to respond.
Two people can retire with nearly identical plans and still experience very different retirements.
A Plan Can Help You Spend With Confidence
The Retirement Window may be one of the most important stretches of your financial journey. While you can't control what the market does during those years, you can prepare your retirement plan for a range of possibilities.
If you'd like to stress-test your retirement plan, let's talk. Together, we can explore different scenarios and discuss strategies that may help you stay confident, no matter what the market brings.
Sincerely,
Dustin Javier, CFP®
Defined Capital
http://www.defineyourcapital.com
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Dustin Javier, CFP®
Defined Capital
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Dustin Javier, CFP®
Defined Capital
- 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]
Content prepared by Snappy Kraken.
Defined Capital LLC ("Defined Capital") is a Registered Investment Advisor ("RIA"), located in the State of Illinois. Defined Capital provides investment advisory and related services for clients nationally. Defined Capital will maintain all applicable registration and licenses as required by the various states in which Defined Capital conducts business, as applicable.
All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
This guide is provided for informational purposes only; it is not designed as advice for an individual's personal situation. The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. Our firm does not provide, and no statement contained in the guide shall constitute, tax or legal advice. All individuals are encouraged to seek the guidance of a qualified professional regarding their personal situation.
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Dustin Javier, CFP®
Defined Capital
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