This week, I came face-to-face in the mirror with 60-year-old Chuck. Up until that moment, he was never anyone I worried about meeting.

I have been planning for the meeting in 2027 that I will have with 65-year-old Chuck since I was in my 20s and started my work career. I could barely afford to set aside anything, and yet I contributed to the retirement plan because I knew that someday my 65-year-old self would show up asking what I had done with his money.

That future self has dogged me for decades; whenever I was tempted to save less or spend more, 65-year-old Chuck’s inevitable arrival was my motivation to keep saving.

What I couldn’t have anticipated, however, was just how stock market and economic conditions might impact the time leading up to and around his arrival. My 60th birthday this week — on a day when the stock market was having one of its worst 200 days in history, no less — rang the bell on that.


It makes no difference that I don’t see myself retiring in any traditional sense for a long time, if ever. The juxtaposition of current conditions and a big birthday was a wake-up call that everyone needs, regardless of age.


Specifically, what investors need to wake up to is “sequence-of-return risk.”

For all of the things you hear about the market, economy and world events right now, sequence-of-return risk may be the most personal, least understood and discussed.

Yet it proves the idea that the stock market doesn’t know or care when you need your money.

In all my focus on getting to retirement, I never gave 55-year-old Chuck much concern until going through a surprise divorce in my early 50s. The 55-year-old self is important because that’s who makes the stretch run toward retirement, the version of you whose decisions can play catch up, or downsize and economize and prepare for retirement takeoff or, alternatively, doom you to a retired life of struggle.

The market was chugging along when I hit my mid-50s.

That’s not the case as I enter my 60s.

For anyone in the later stages of their working life, they are about to find out why many financial advisers describe the last 10 years of a work as “the fragile decade.”


Retire into or just before a market downturn and the combination of withdrawals and poor performance can tap a nest egg much faster than expected and make it hard to recover.

For proof, consider someone retiring with $500,000 in savings/investments, planning to pull $20,000 of that per year.

Keeping the math extremely simple, let’s say that the market in their first decade in retirement will have five years of 5% losses and five years of 10% gains.

If the five good years come first, the saver finishes the decade with roughly $450,000 (having taken $200,000 out of the account over those years). If the good and bad years alternate, they have roughly $410,000 if their sequence starts with a positive first year, and a bit under $395,000 if the first year is negative.

But if the first five years of the decade are the 5% losers, the investor will have roughly $370,000 left, despite the big bounce-back at the end.

Now consider that we’re currently in bear-market territory, with the stock market off more than 20% from highs. On my show, “Money Life with Chuck Jaffe,” I’ve talked with many experts who see a protracted downturn ahead, with the market stumbling along until it gets through a recession in 2023 or ’24.


While it is easy to pooh-pooh the most dire forecasts that have the market losing half to two-thirds of its value, consider that it’s already taken a big step down.

When you’re gawking at the price on the gas pump or expressing frustration with the high prices in the supermarket, it’s not hard to envision a significant decline from current levels.

So while you may not subscribe to the worst-case predictions, there’s no denying that they seem more plausible now than at any time since the financial crisis of 2008.

And no matter how you feel about the government and hope things might be different, its clear that recession is coming. No political party has the power to stop it, though they might be able to stall it for a while.

That actually adds to the alarms in my 60-year-old head.

With retirement looming, I want that recession and downturn to occur as quickly as possible. The pieces are in place for a long-term economic recovery and a return to impressive long-term growth, but only after the economy digests the bile and blockages that have built up in the last 15 years.

The sooner we swallow that bitter pill, the more quickly we move past it, the better the environment for people of my age to retire.


Research from Fidelity Investments suggests that a good retirement-savings goal is to amass 10 times your salary by age 67 (they say you’re on track if you’ve saved your salary by age 30, have three times your salary at 40, six times by 50 and eight times by 60).

But that’s a “guideline,” a starting point to build a plan.

That plan needs to weigh the market and economy, too.

If your plan is to hit a savings goal or a life milestone and call it quits, that’s dangerous right now.

Ignoring what the market is likely to do to your lifetime of savings in the next few years is running headfirst into trouble.

You may never have “timed the market,” but timing should be a factor in your life choices.

If you have continuing good health and safe employment, and more time working would create greater peace of mind in retirement just by adjusting the market circumstances you’ll face when you quit, plan accordingly.

You’ll answer for your decisions to your ultimate future self, the one you face in the mirror every day of your retired life.