By Siri · March 2026 · 12 min read
The point of running what-if scenarios is not to catastrophize. It is to make decisions now — while you still have time to respond — rather than discovering a problem when it has already arrived.
Each scenario below includes the actual numbers and the specific things you can do today to reduce your exposure. Run through all six. The ones that make you most uncomfortable are the ones that most need your attention.
Why This Matters
This is the sequence of returns risk scenario — the most dangerous financial event that can happen to a new retiree. A 30% drop in year 1, combined with withdrawals, can permanently impair your portfolio even if markets fully recover.
The Numbers
If you have $1M and withdraw $40,000 (4%) in year 1 while the portfolio drops 30%, you start year 2 with $660,000 — not $960,000. Your portfolio now needs to grow back to $1M starting from a much lower base while you keep withdrawing. This is how retirement portfolios fail even in strong markets over the long run.
What to Do Now
Build a 1-2 year cash cushion before retiring so you do not need to sell equities in a down market
Begin shifting allocation 3-5 years before retirement — not the day you retire
Have a plan for what you will cut first if markets drop 20%+ in year 1
Know your 'floor' income: Social Security + any fixed income that covers your non-negotiable expenses
Why This Matters
Age discrimination is real and statistically documented. Women over 55 who lose jobs take significantly longer to find comparable work. This scenario forces you to ask: could you survive financially if your income stopped today?
The Numbers
The average job search for displaced workers over 55 is 7-9 months. If you find a job, it pays on average 20-30% less than your previous role. If you do not, you may need to start drawing from retirement accounts earlier than planned — potentially triggering a 10% penalty if you are under 59.5 and taking taxable withdrawals.
What to Do Now
Have 6-12 months of living expenses in liquid savings — not invested
Know your 72(t) SEPP rules: you can access retirement accounts before 59.5 without penalty if you follow specific distribution rules
Keep your professional network warm — it is your best hedge against long job searches
Know what your expenses would look like at 80% of your current income for 2 years
Why This Matters
A 65-year-old woman today has an average life expectancy of about 86 — and a 1-in-3 chance of reaching 90+. Most retirement calculators default to age 85. Planning to age 85 when you live to 95 means running out of money at the worst possible time.
The Numbers
Using a 4% withdrawal rate, a $1M portfolio lasts approximately 30 years — to age 95 if you retire at 65. But if you retire at 60, you need that $1M to last 35 years, which pushes your safe withdrawal rate closer to 3.5%. Every year earlier you retire, add 5-7 years to your required portfolio lifespan.
What to Do Now
Plan to at least age 90, ideally 95. Use 30-35 year retirement horizons, not 20-25
Delay Social Security as long as possible — it is the best longevity insurance you have
Consider a deferred income annuity that starts at 80-85 as a longevity hedge
Build flexibility into your withdrawal rate — plan to reduce spending by 10-15% if the portfolio underperforms
Why This Matters
Healthcare inflation consistently outpaces general inflation. If you retire before 65, you face 3-5 years of private market healthcare costs. Even after Medicare, out-of-pocket costs for a couple average $345,000 over a retirement lifetime (Fidelity 2025 estimate) — and that excludes long-term care.
The Numbers
The enhanced ACA subsidies expired at the end of 2025 — 2026 premiums rose 18-20%. A 60-year-old woman on an unsubsidized Silver plan now pays $800-$1,400/month in premiums depending on state, plus $3,000-$7,000 in deductibles and out-of-pocket costs annually. If you qualify for subsidies (income below ~$62K/year), costs drop significantly — but you must plan your retirement income around that threshold. A serious illness or hospitalization could cost $20,000-$50,000 even with insurance. Add dental, vision, and hearing (not covered by traditional Medicare) and costs compound further.
What to Do Now
Build a healthcare line item into your retirement budget, not a vague estimate
Research your ACA options now — your income in retirement affects premiums dramatically
Look into an HSA if you have access to one — these are triple tax-advantaged and ideal for healthcare in retirement
Have a separate healthcare emergency fund of $25,000-$50,000 outside your core retirement accounts
Why This Matters
Retirees are uniquely vulnerable to inflation. Your income is (largely) fixed while your costs keep rising. A sustained period of 5-6% inflation over 5 years reduces your purchasing power by 25-30% — meaning the same lifestyle costs significantly more than your withdrawal plan assumed.
The Numbers
If inflation runs at 5% for 5 years, your $5,000/month retirement budget effectively becomes a $6,381/month budget in real terms. If you do not adjust withdrawals, you are slowly underfunding your lifestyle. If you do adjust withdrawals, you are drawing your portfolio down faster than planned.
What to Do Now
Include a 3% annual inflation adjustment in your retirement income projections — not 0%
Maintain exposure to equities in retirement — stocks are one of the best long-term inflation hedges
Consider I-bonds or TIPS for a portion of your fixed income allocation
Build discretionary spending into your budget that you can cut without impacting quality of life
Why This Matters
The sandwich generation is real and disproportionately affects women. Financial support of adult children (education, job loss, housing) or aging parents (caregiving costs, supplemental income) is one of the least-modeled but most common retirement disruptions.
The Numbers
Women spend an average of 44% more time on caregiving than men and are more likely to reduce work hours or leave the workforce entirely. The direct financial cost of supporting an aging parent can run $10,000-$30,000+ per year. Supporting an adult child through a crisis might mean $5,000-$15,000/year for 1-3 years.
What to Do Now
Have explicit conversations with your parents about their financial situation and plans for care
Know your own 'helping budget' — the maximum you can provide without permanently damaging your retirement
Do not sacrifice retirement savings to support adult children. You cannot borrow for retirement the way they can borrow for other needs
Look into long-term care insurance for your parents if they do not have it — this protects both them and you
Every scenario has the same underlying structure: flexibility is the defense. Portfolios that survive the bad scenarios are ones built with margin — cash buffers, adjustable expenses, multiple income sources, and a realistic withdrawal rate.
You cannot predict which scenario will happen to you. You can build a retirement plan that survives most of them.
Pick the one scenario that scares you most. Open a spreadsheet and model it out — with real numbers from your actual situation. Write down the three actions you would take if it happened. You will feel measurably less afraid of it once you have a plan.
Disclaimer: This is educational content, not financial advice. Scenarios are illustrative. Work with a fee-only fiduciary advisor for decisions specific to your circumstances.