How a Couple Near Retirement Rebuilt Their Withdrawal Plan
Sam's List Editorial | 2026-07-17
How a Couple Near Retirement Rebuilt Their Withdrawal Plan This is an illustrative scenario, representative of the kind of retirement planning work described below. Details are anonymized and any figures are for illustration; outcomes vary by household and are not reliable. The riskiest years for a retirement portfolio are the ones right around when you stop working. A retirement withdrawal plan that looked fine in a rising market can quietly fall apart if the market drops just as you start drawing income. This representative case study follows a couple near retirement who rebuilt their plan after exactly that kind of scare. They had done a lot right, saved diligently, stayed invested, avoided panic selling in past dips. What they had not done was think carefully about the order and timing of withdrawals once the paychecks stopped. That gap is common, and it is where a market drop near retirement does its damage. The Problem The couple was a year or two from retiring when a market downturn cut into their portfolio. Their plan, to the extent they had one, was simple: retire on schedule and start withdrawing a set amount each year. What worried them was the thing they could not un-see. If they began drawing down a shrunken portfolio, they might be locking in losses they would never recover. That worry has a name: sequence-of-returns risk. Two portfolios with the same average return can end very differently depending on when the bad years hit. Poor returns early in retirement, while you are withdrawing, do more lasting harm than the same returns later. The couple sensed the danger without having the framework to address it. The Approach Working with a planner, the couple's focus shifted from "how much do we have" to "in what order do we spend it." In planning work of this kind, a few levers come up. A cash buffer, a reserve of one to two years of spending held outside the market, so you are not forced to sell investments at a low. A withdrawal order that draws from the right accounts first for tax efficiency. And a hard look at whether the retirement date or the first-year spending needed to flex given the starting point. None of these are exotic. They are the difference between a portfolio that has to sell into a downturn and one that can wait for recovery. The planning also meant confronting trade-offs honestly: a larger cash buffer is safer but earns less, and adjusting a retirement date is not a small thing to ask of someone who is ready to be done. What Changed In this illustrative scenario, the couple did not get a guarantee, because no honest plan...
