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Financial Resilience · Authority Guide

Market Drawdown Resilience

Market shocks compound with employment shocks during recessions. Resilient households hold a glide path that survives both at once.

In this guide

  1. 1 · Executive summary
  2. 2 · Key takeaways
  3. 3 · Key strategies
  4. 4 · Pro-tips checklist
  5. 5 · FAQ
  6. 6 · Related guides & tools

Executive summary

Market shocks compound with employment shocks during recessions. Resilient households hold a glide path that survives both at once.

  • Hold ≥ 3 years of withdrawal needs in cash + bonds at retirement
  • Bond allocation rises 1% per year past 40
  • Sequence-of-returns is the dominant risk

Key takeaways

  • Hold ≥ 3 years of withdrawal needs in cash + bonds at retirement
  • Bond allocation rises 1% per year past 40
  • Sequence-of-returns is the dominant risk
  • Rebalance annually, not opportunistically

Key strategies

  1. Strategy 1

    Hold ≥ 3 years of withdrawal needs in cash + bonds at retirement

  2. Strategy 2

    Bond allocation rises 1% per year past 40

  3. Strategy 3

    Sequence-of-returns is the dominant risk

  4. Strategy 4

    Rebalance annually, not opportunistically

Pro-tips checklist

  • Avoid rebalancing within shock
  • Pre-plan the drawdown sequence

FAQ

What's a safe withdrawal rate during a downturn?

Drop to 3% temporarily; the rule of 4% assumes no consecutive bear years at the start.