Quick Read – Selling investments early in retirement during a downturn locks in losses permanently.
Consider that a 4% withdrawal from $600,000 means $24,000 sold at depressed prices annually. – Claiming Social Security at 62 cuts benefits by up to 30%, but the income can pause portfolio withdrawals and let a down market recover. – Couples should split claim ages: the lower earner files at 62 for immediate income while the higher earner delays to 70, adding 8% per year. – Picture a couple, both 62, who retired this spring after decades of work
Their 401(k) shows roughly $600,000, the number they had spent years circling on the spreadsheet. Then the markets turned ugly, their statements thinned out, and the same question started keeping them up at night: did we retire at exactly the wrong moment? It is a familiar feeling in this uncertain economy.
In May, consumer prices rose 4.2% annually, the highest rate in three years, according to the Bureau of Labor Statistics. Meanwhile, consumer sentiment fell to its lowest reading since the survey began tracking Americans’ feelings about the economy more than seven decades ago, according to the University of Michigan. On forums where new retirees compare notes, variations of the same post appear almost daily: we just retired, the portfolio is down double digits, and we are terrified to start pulling from it.