Why The Sequence of Returns Matters For Your Financial Future

At EmVision Capital Advisors, one of our key priorities is helping you secure your financial future, especially as you approach or enter retirement. A crucial concept to understand is the sequence of returns—an often-overlooked factor that can dramatically influence the longevity of your portfolio.

In the brief video below, our Founder and CEO Michael Embrescia, breaks down the sequence of returns and explains why it’s so important for retirees or anyone withdrawing income from their investments.

Watch The Video    

What is The Sequence of Returns?

The sequence of returns refers to the order in which investment gains and losses occur. While it may seem like the average return is all that matters, the timing of these returns is just as critical—especially during retirement.

Imagine this:

• Two retirees start with the same amount of savings and experience identical average annual returns.
• One retiree faces a market downturn in the early years of retirement, while the other experiences it later.

The retiree with losses in the early years could see their portfolio depleted much faster because withdrawals amplify the impact of those early losses. This is what makes the sequence of returns so important.

Why Should You Care?   

As a wealth advising firm, we aim to help you navigate challenges like these through strategic planning. Understanding the sequence of returns allows us to:

• Protect Your Retirement Income: By creating a diversified portfolio and crafting a withdrawal strategy, we can help reduce the risk of outliving your savings.
• Manage Market Volatility: Using tools like cash reserves or income-generating assets, we create a buffer against market downturns.
• Provide Long-Term Confidence: With the right plan in place, you’ll have greater confidence knowing your retirement income is built to weather market fluctuations.

How We Can Help

We’re committed to helping you build and maintain a retirement plan that’s tailored to your unique needs and goals. We use strategies like:

• Implementing withdrawal schedules to minimize risks.
• Diversifying investments to reduce exposure to market volatility.
• Planning for tax-efficient withdrawals to preserve your wealth.

Next Steps

If you’re concerned about how the sequence of returns might affect your financial future, we’re here to help. Schedule a meeting today to ensure your portfolio is positioned for success, no matter what the market brings.

James Artale is a financial advisor located at EmVision Capital Advisors, 251 W. Garfield Rd. ​Suite 155 Aurora, OH 44202. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at (330) 954-3770 or at info@emvisioncapital.com.