Professional athletes often describe the decision to retire as one of the toughest in their careers. Financial advisors say the same applies to their clients, but the stakes involve decades of savings rather than a final season.
Mallon FitzPatrick, head of wealth planning at Robertson Stephens, frames retirement date selection not merely as a lifestyle choice but as a risk variable. He points to research from Kitces.com indicating that three out of four retirement outcomes are determined not by accumulation size but by the market environment at the time of retirement. The years immediately before and after retirement are when portfolios are largest and most exposed to sequence-of-returns risk.
“A significant market decline early in retirement does damage that may be difficult to undo, because you are withdrawing funds at the worst possible time,” FitzPatrick said. The research found that flexibility around the retirement date, even a two-year window, could produce a difference of roughly two-thirds in final portfolio value depending on when within that window retirement occurs.
Rather than planning against average expected returns, FitzPatrick recommends running projections through a bear market in years one through five, a prolonged period of elevated inflation early in retirement, or a combination of both. “Seeing these scenarios side by side often changes the conversation. The question is no longer ‘can I retire?’ but ‘how resilient is my plan if conditions are unfavorable early on?’”
Stephanie Shields, a wealth advisor at Thrivent, emphasizes stress-testing plans around spending assumptions, income durability, and inflation sensitivity. Many clients underestimate spending or haven’t pressure-tested expense flexibility against adverse market or price movements. She advises walking clients through scenarios modeling higher-than-expected inflation, lower early-retirement returns, and longer lifespans, while evaluating how much income is guaranteed versus market-dependent. Shields ensures essential expenses are covered by reliable income sources, with growth assets positioned for long-term needs. “Stress-testing now, before a retirement date is locked in, gives clients time to adjust factors like savings rates and retirement timing in a more controlled way,” she said.
Troy Davidson, wealth advisor at Ballast Rock Private Wealth, calls retirement timing one of the most “consequential and underappreciated” decisions. Given elevated oil prices from the Iran conflict, a higher-for-longer Fed posture, and geopolitical uncertainty, he advises pre-retirees within five years of their target date to stress-test withdrawal rate sensitivity, portfolio concentration, and tax drag on withdrawals. “Pre-tax accounts withdrawing into a volatile market at forced rates can compound the sequence risk problem. This is the moment to evaluate Roth conversions, tax-loss harvesting, and drawdown sequencing across different account types,” Davidson said.
Kenneth Couser, vice president and director of financial planning at Janney Montgomery Scott, advocates a cash bucket strategy to protect against early-retirement market declines. Holding one to three years of spending in cash or short-term bonds provides liquidity and allows retirees to avoid selling investments at a loss during market drops. “A well-built plan does not eliminate sequence risk, it manages it. The goal should not be to predict the markets but create enough flexibility to avoid locking in losses at the worst possible time,” Couser said.
Advisors also recommend reviewing strategies to prevent cash crunches and staying informed about persistent retirement anxiety among clients. The broader context of gaps between financial optimism and readiness underscores the importance of rigorous planning.
