That’s a concept the industry calls sequence-of-returns risk, and along the Wasatch Front, I see more retirements quietly derailed by it than by almost anything else. Let me lay it on the line: When you were working and saving, a bad market was your friend. Every paycheck bought more shares on sale, and a rough patch at 45 was long forgotten by 60. The day you stop contributing and start withdrawing, that math flips upside down.

The red zone

Researchers call the five years before and the five years after your retirement date the “retirement risk zone.” It’s the most dangerous stretch of your financial life, and most folks walk into it without knowing it exists. Here’s why the timing matters so much. If the market drops 25% in your second year of retirement and you’re selling shares every month to cover the mortgage and the grandkids’ ski passes, you’re locking in those losses. The shares you sold at the bottom never get to recover. Two portfolios can post the identical 20-year average return; the one that takes its losses early, while you’re drawing income — can end up nearly broke while the other stays comfortable.

This isn’t theory. Morningstar’s latest research pegs a “safe” starting withdrawal rate for 2026 retirees at just 3.9%, not the old 4% you’ve heard your whole life, and they’re blunt about the reason: A bad early stretch, combined with steady withdrawals, is what breaks plans. And here’s the counterintuitive part, they found that loading up on stocks doesn’t help. Portfolios that are too equity-heavy actually support a lower safe withdrawal rate, because the extra volatility magnifies exactly this risk.

You can’t predict it, but you can absorb it

Here’s the frustrating truth: Nobody rings a bell to tell you whether your first five years will be kind or cruel. You can’t control the sequence. What you can control is whether a bad sequence forces you to sell at the worst possible moment.

The retirees who sail through the red zone almost always have one thing in common, a layer of money that isn’t riding the market’s mood at all. When stocks are down, they draw from the protected bucket and leave their invested dollars alone to recover. When markets are up, they can refill it. That single habit, never being forced to sell into a loss, is what separates the two neighbors in my example.

This is where a fixed index annuity earns its keep in a Utah retirement plan. An FIA is built so your principal doesn’t participate in market losses. In a down year your credited value simply holds, a zero floor, rather than dropping 25% right when you need to spend it. It isn’t chasing the highest possible return; it’s providing the calm, protected foundation you draw from while the rest of your portfolio rides out the storm. Pair that with delaying Social Security where it makes sense, one of the highest-value moves a couple can make, and you’ve built a paycheck that doesn’t care what the market did last Tuesday.

The Utah angle

We’re a self-reliant bunch here in Utah. We like standing on our own two feet, and I respect that. But self-reliance in retirement doesn’t mean white-knuckling a stock portfolio and hoping the timing works out. It means engineering your income so a rough couple of years can’t undo thirty years of disciplined saving.

I’ve watched home values in Lehi and Sandy climb past what we’d have imagined a decade ago. That prosperity has left many good people with more market exposure than they realize, right as they cross into the risk zone. If you’re within five years of retirement on either side of that line, do yourself a favor: Find out what happens to your income if the market hands you a bad first act. If you don’t like the answer, there’s still time to build a floor under it.

Lyle Boss, The REAL BOSS Financial, a native Utahn and retirement specialist who has spent decades helping families across Utah and the Mountain West build secure, income-focused retirement plans. Boss Financial, 955 Chambers St. Suite 250, Ogden, UT 84403. Telephone: 801-475-9400. https://www.safemoneylyleboss.com/