For those who aim to retire early, protecting our retirement is a must.

All of us have the same fear – running out of money as we live out our twilight years whilst chained to a hospital bed.

One of the common ways for an Early Retirement Plan to fail badly would be based on what is called a “sequence of return” risk.

Imagine facing a recession within 2 years of leaving the workforce – your investments have not made much in the way of returns yet, but you are forced to draw down on your retirement capital.

When the market recovers later, you’ve eaten so much of your capital that you cannot exploit the bull market that follows.

Take a look at the table below.

The timing of the negative returns matters a whole lot. I cannot emphasize this enough.

Brown: If you retire and are immediately hit