New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Navigating Sequence Risk in Retirement: Lessons and Strategies for REV Group Employees

Healthcare Provider Update: REV Group provides its employees with a competitive benefits package that includes medical, dental, vision, and prescription coverage. Employees can access virtual care through Teladoc, diabetes management programs, and HSAs. Additional benefits include life and disability insurance, voluntary accident and critical illness coverage, and a 401(k) retirement plan 4. Healthcare costs in the United States are projected to continue rising through 2026, with insurers proposing significant premium increases for Affordable Care Act (ACA) plans. A recent analysis found that ACA insurers are seeking a median premium increase of 15% for 2026, marking the largest hike since 2018. This surge is attributed to factors such as the anticipated expiration of enhanced premium tax credits, rising medical costsincluding expensive medications and increased hospital staysand a shift in the risk pool towards higher-cost enrollees. Without the renewal of enhanced subsidies, out-of-pocket premiums for ACA marketplace enrollees could increase by more than 75% on average. Click here to learn more

'REV Group employees approaching retirement should recognize that the sequence of market returns in their early years can influence the longevity of their income far more than the average return itself, making disciplined withdrawal strategies and diversified income planning essential.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

'REV Group employees nearing retirement can benefit from understanding how market downturns early in retirement may have lasting effects, and from adopting flexible, research-based withdrawal and allocation strategies to help sustain their income over time.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

Historical examples of sequence-of-returns risk and their effects on retirement income.
Why the first years of retirement are most critical for portfolio sustainability.
Research‑backed strategies for managing sequence risk and supporting long‑term retirement goals.

Contributed by Paul Bergeron and Brent Wolf of Wealth Enhancement

For Fortune 500 employees approaching retirement, recognizing the timing of returns—not just the average return—can be critical to keeping income going over the long term. This concept, known as sequence-of‑returns risk, shows how poor early market performance in retirement can have a lasting impact on a withdrawal plan, even if long-term averages seem strong. Historical market data provides clear examples of this risk and offers practical methods for responding to it.

Historical examples of sequence risk

Fortune 500 retirees entering retirement during tough market cycles face situations similar to the declines seen in the late 1960s, when the market hit two bear markets (1968–70 and 1973–74) alongside high inflation. The S&P 500 dropped roughly 48% during the 1973–74 bear market, compounding inflation-related difficulties. ¹ Likewise, those retiring in 2000 endured two severe bear markets in the decade, while 2022 proved one of the toughest years for balanced portfolios, with sharp drops in both U.S. stocks and high-quality bonds.

Why the early years matter most

For a Fortune 500 retiree, significant losses in the first five to ten years of retirement—combined with regular withdrawals—can shrink the number of shares left to rebound when markets recover. Academic studies and industry research repeatedly show that even with the same average return, the order of gains and losses plays a huge role in retirement outcomes.

Research-backed strategies to manage sequence risk

One effective method for Fortune 500 retirees is keeping a mix of asset types to help weather downturns. Cash and bonds can act as “shock absorbers” for immediate expenses, reducing the need to sell stocks during market dips. Flexible withdrawal approaches—such as adjusting withdrawals within set guardrails—have been shown to support portfolio longevity better than fixed-dollar withdrawal methods.

Staging risk in a retirement portfolio—by holding one to two years of expenses in cash-like assets and several years in short‑ to intermediate‑term bonds—may give equities time to recover before they're tapped for income. For some Fortune 500 retirees, delaying income sources like Social Security can help raise total lifetime income and lessen the need to tap investments during volatile times. Thoughtful rebalancing and managing tax lots, especially during downturns, can also help maintain equity exposure and extend portfolio lifespan.

Implications for retirement planning

While higher stock allocations may offer greater long-term growth potential, they also increase sequence risk in early retirement for Fortune 500 workers. Historically, balanced portfolios—often with 30% to 50% equities for income-focused funds—have supported more resilient initial withdrawal rates compared to all-stock strategies. ² Strong early-market results can set up long-term success, but disciplined spending limits, guardrails, and rebalancing remain key.

Featured Video

Articles you may find interesting:

Sources:

1.The New York Times. ' What Happens When Stock Markets Become Bears ,' by William Davis, Karl Russell, and Stephen Gandel. 13 June 2022.

2. Vanguard UK. ' Sustainable Spending Rates in Turbulent Markets ,' by Daga, Ankul, et al. Mar. 2021, pp. 1–7.

Other Resources:

1. Guyton, Jonathan T., and William J. Klinger. “ Decision Rules and Maximum Initial Withdrawal Rates .” Journal of Financial Planning , vol. 19, no. 3, Mar. 2006, pp. 48–50, 52–54, 56–58. Financial Planning Association.

2. “ Timeline of U.S. Stock Market Crashes .” Investopedia , 30 Oct. 2024, section “The 1973–74 Oil Crisis Bear Market.”

3. ' When to Start Receiving Retirement Benefits. ' Social Security Administration, Pub. No. 05-10147, May 2024, pp. 1–2.

4. Arnott, Amy C., CFA, and Ivanna Hampton. “ Why More Diversification Doesn’t Mean Better Returns .” Morningstar , 7 June 2024.

What type of retirement savings plan does REV Group offer to its employees?

REV Group offers a 401(k) retirement savings plan to help employees save for their future.

Does REV Group provide a company match for its 401(k) contributions?

Yes, REV Group offers a company match for employee contributions to the 401(k) plan, enhancing employees' retirement savings.

How can employees at REV Group enroll in the 401(k) plan?

Employees at REV Group can enroll in the 401(k) plan through the company’s benefits portal or by contacting the HR department for assistance.

What is the minimum age requirement for employees to participate in REV Group's 401(k) plan?

Employees must be at least 21 years old to participate in REV Group's 401(k) plan.

Can employees at REV Group change their contribution percentage to the 401(k) plan?

Yes, employees at REV Group can change their contribution percentage at any time, subject to the plan's guidelines.

What investment options are available in REV Group's 401(k) plan?

REV Group's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

Is there a vesting schedule for the company match in REV Group's 401(k) plan?

Yes, REV Group has a vesting schedule for the company match, which means employees must work for a certain period to fully own the matched contributions.

How often can employees at REV Group review their 401(k) account statements?

Employees at REV Group can review their 401(k) account statements quarterly, providing them with updates on their retirement savings.

What happens to my 401(k) account if I leave REV Group?

If you leave REV Group, you have several options for your 401(k) account, including rolling it over to another retirement plan, cashing it out, or leaving it with REV Group until you reach retirement age.

Does REV Group offer loans against the 401(k) plan?

Yes, REV Group allows employees to take loans against their 401(k) plan, subject to certain terms and conditions.