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Duffy Won't Give Timeline to Restore Flights as Shutdown Appears Near End The New York TimesTransportation boss says flight delays so far are 'tiddlywinks' compared to what's to come USA TodayWATCH LIVE: Transportation Secretary Sean Duffy to give air travel update at O'Hare NBC 5 ChicagoFlight restrictions will ease, DOT says — o
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Apple is now selling a $150 sling for your iPhone made by the same designer who created Steve Jobs' iconic black turtleneck FortuneIntroducing iPhone Pocket: a beautiful way to wear and carry iPhone AppleApple made a $230 crossbody… sock The VergeApple unveils $229 iPhone Pocket described as 'a piece of cloth' Interesting EngineeringApple launches $230 iPhone Pocket case. See internet's reaction USA Today
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Amazon is making it easier for advertisers to play around in its massive database of consumer data. The ecommerce giant today announced Ads Agent, a new generative AI-powered chatbot within […]
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Anyone newly retired or nearly so must feel like they have the worst timing in the world. A portfolio tends to be largest near retirement, just before those savings are about to be drawn down. These days, however, most portfolios have lost value; the S&P 500 is down about 20% so far this year.
The financial industry has a name for this scenario: sequence of return risk. "It matters most at retirement when you're selling assets for income," says Wade Pfau, a professor of retirement income at The American College of Financial Services in King of Prussia, Pa. "You need to sell a larger number of shares to get the same amount of money. Those shares are then gone so even if the market bounces back, your portfolio won't recover as much."
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The newly retired are particularly vulnerable because they're "relying on this pot of money to finance the next 20 to 30 years of their life," says Amit Sinha, head of multi-asset design at Voya Investment Management in New York City.
Sequence of return risk is less of a concern for someone further along in retirement because retirees typically shift to safer, more conservative investments and have fewer years to pay for. Plus, these investors may have benefited from portfolios boosted by strong returns early in retirement.
Similarly, if retirement is a decade or more away, what happens to markets today is mostly irrelevant. "You just allow the compounding to work for you and recover over those years," says Sinha.
Someone retiring now, of course, doesn't have that luxury. If this describes you, there are several things you can do to minimize the damage, but first, assess what it's likely to mean for your portfolio long term.
Depending on how you react now, t
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