Quick Thoughts: Sequence of Returns Risk

Quick Thoughts: Sequence of Returns Risk

From Dynamic Growth by Crosby Advisory Group

July 13, 2026 · 5 min

About this episode

Nate discusses the critical retirement risk of sequence of returns and how to mitigate it with strategic planning and indexed universal life insurance.

Nate explains a critical, often overlooked retirement risk: sequence of returns risk—the danger of encountering poor market performance right when you begin taking withdrawals. Even when two retirees earn the same average annual return, the order in which those returns arrive can significantly change outcomes. Nate discusses how to plan for adverse early-retirement markets and presents indexed universal life insurance (IUL) as a flexible, non-market-loss-exposed income source to help mitigate this risk. Key Discussion Points: Sequence of returns risk: It's not a concern until withdrawals begin, typically in retirement. Losses during downturns are compounded when assets are sold to generate income at depressed prices. Even if markets recover, reduced asset bases mean less participation in the rebound, potentially shortening portfolio longevity. Same average return, different outcomes: Two retirees with identical portfolios and a 7% average annual return over 20 years can have dramatically different results depending on whether negative years occur early vs. late in retirement. Early losses paired with withdrawals can rapidly erode principal, demonstrating that the sequence of…

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Organizations: Crosby Advisory Group

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