A. There are many critical factors that could ruin one's portfolio, below is an incomplete list -
- Sequence of return risk
- Longevity risk
- Retirement spending risk
- Unexpected shocks (e.g. health shock)
While sequence risk doesn’t necessarily ever vanish in full, especially as our spending and longevity factors may change as we age (e.g., we adopt a healthier lifestyle in retirement and now anticipate living longer, or we have a good market return to get ahead but then lift up our spending and are no longer so far “ahead” on a relative basis anymore!). Nonetheless, sequence risk still remains a major driver, albeit one that may have a varying impact depending on where someone is in their retirement time horizon, and whether/how it has changed from the goals and assets that were in place at the start of retirement.
If you want to read more about this topic, here is an article that argues that The Critical Factors Of Portfolio Ruin Aren’t Predictable.