Running the Engine in Reverse

For decades the engine fills the pot: contributions go in and growth builds on growth. In retirement it runs in reverse. Money comes out, and that changes what a market fall does. When prices drop, you have to sell more units to raise the same cash, and units sold near the bottom aren’t there to recover.

So once you’re withdrawing, the order of good and bad years matters, not just their average. This lesson explains that mechanism so you can question a retirement plan; it doesn’t set a withdrawal rate for you.