Sequence of Returns Risk <em>A Crucial Factor for Retiring Engineers</em>

In retirement planning, timing isn’t just a detail—it’s crucial. Sequence of Returns Risk (SoRR) is akin to unforeseen delays in an engineering project; if the market dips as you retire, early losses, compounded by withdrawals, can undermine your financial foundation quickly. It’s akin to starting a major road trip that begins with a flat tire—possible, but far from ideal.

To counter this, think like an engineer: build in a buffer. A cash reserve of 3-10 years’ worth of net living expenses acts like a safety buffer in an engineering project, cushioning against market dips and ensuring your retirement finances remain robust no matter the economic conditions.