Do early retirees set themselves up for additional sequence of returns risk?

[Gone Fishing]

Just a notion, but it seems like early retirees might be more likely to pull the ER trigger near the top of the cycle vs a "traditional" retiree who is usually aiming for a target age for retirement to coincide with SS or pension benefits rather than a target stache size.

Any thoughts?

[Mississippi Mudstache]

My guess is that the average early retiree is far more aware of market conditions and the concept of "sequence of returns" risk than the average retiree, so no, I wouldn't expect the problem to be more prevalent in the ER community. Have you looked at the SWRs of some of the early retirees on this forum? It actually seems pretty rare for people around here to pull the plug as soon as they hit the magic 4%.

[brooklynguy]

Read this thread for some excellent discussion on this topic:

http://forum.mrmoneymustache.com/ask-a-mustachian/firecalc-and-cfiresim-both-lie/

[Gone Fishing]

Read this thread for some excellent discussion on this topic:

http://forum.mrmoneymustache.com/ask-a-mustachian/firecalc-and-cfiresim-both-lie/

Perfect, Thanks!

[Retire-Canada]

Just a notion, but it seems like early retirees might be more likely to pull the ER trigger near the top of the cycle vs a "traditional" retiree who is usually aiming for a target age for retirement to coincide with SS or pension benefits rather than a target stache size.

Any thoughts?

I think that risk would get mitigated by the typical FIRE's understanding of the sequence of return risks, their frugality/cost control ability and their ability to keep earning some money.

Traditional retirees have the extra risk of being unable to work past a certain age due to health issues or work age restrictions/age biases and may not have the cost reduction flexibility of FIREs if they are at the low end of savings/pension benefits.

Flexibility is a very powerful risk mitigation tool.

-- Vik