The risk that the order of good and bad years works against you. While you're still saving, order barely matters. Once you're drawing money out, a rough stretch early does lasting damage — because you're selling into a decline, and those dollars aren't there to recover when things turn.
Why Order Does Not Matter Until It Does
If you're contributing and not withdrawing, a bad year is almost a non-event in the long run — your later contributions buy in cheaper and the arithmetic sorts itself out.
Start withdrawing and that reverses. Now a bad year means taking money out of something that's already down, and permanently reducing what's left to participate in a recovery.
Two Identical Averages, Two Different Outcomes
Two retirements can experience the same average over twenty years and end up in completely different places, purely because of when the bad years landed. Averages hide this entirely, which is why they're dangerous to plan with.
It's the difference between a drought in the year you're building the herd and a drought in the year you're selling down. Same drought, very different consequence.
What People Do About It
The general approaches involve having something to draw on that isn't exposed to the same swings, keeping flexibility in how much you take, and paying attention to the first several years in particular.
We're not prescribing a structure here — that depends entirely on what you've got and what you need. It's one of the better reasons to plan the drawdown before you're in it, not during.
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