The 14-Time Trap: Why Market 'Averages' Can't Save Your Retirement

Here's a stat that should make every soon-to-be retiree nervous:

Over the last 100 years, the market has experienced an average 40% loss every 6 years. Do the math on a 70-year lifespan, and you're looking at roughly 14 major market crashes in a lifetime.

Fourteen.

Now, if you're 35 years old with three decades until retirement, a 40% drop is a buying opportunity. Time is on your side. You keep contributing, you buy shares at a discount, and eventually the market recovers. No big deal.

But if you're 63 and about to retire, or worse, if you're 66 and already retired, that same 40% loss isn't a "dip." It's a disaster. And the advice Wall Street keeps giving you? "Stay the course." "Don't panic." "The average return is 10% over time."

Yeah, well, averages don't pay your bills in retirement.

The Problem with "Average"

Let's say you retire with a $1 million portfolio. Wall Street tells you the S&P 500 has averaged about 10% per year since 1926. Sounds great, right? You figure you can pull out $50,000 a year, adjust for inflation, and ride off into the sunset.

But here's what they don't tell you: the S&P 500 only actually delivered 10% or more per year about 50% of the time across rolling 10-year periods. The other half of the time? You got less. Sometimes way less.

Returns are "lumpy." Some years you're up 25%. Other years you're down 40%. It all averages out to 10% over a century, but you don't get to live for a century in retirement. You get maybe 20 to 30 years. And if the bad years happen at the wrong time: right when you're pulling money out: you're cooked.

This is called sequence of returns risk, and it's the silent retirement killer that Wall Street conveniently forgets to mention.

The Red Zone: Where Crashes Become Unrecoverable

There's a narrow, dangerous window in your financial life that we call the Red Zone: the 5 years before retirement and the 5 years after. This is when sequence of returns risk hits hardest.

Why? Because during this decade, you're transitioning from contributing to your portfolio to withdrawing from it. And when you're forced to sell shares during a market crash just to cover your living expenses, those shares are gone forever. You don't get to "buy the dip." You don't get to wait it out. You're liquidating at a loss because you need to eat.

Let's look at a real-world example. Someone who retired in 2000 with $1 million, planning to withdraw $50,000 per year (adjusted for inflation) and invested entirely in the S&P 500, would have run out of money in just 16 years.

Why? Because between 2000 and 2009, the market dropped more than 50% twice: first during the dot-com crash, then again during the 2008 financial crisis. That retiree had to keep pulling money out during both crashes, selling shares at massive losses. By the time the market recovered, there wasn't enough portfolio left to benefit from the rebound.

The "average" didn't save them. The timing killed them.

The 14-Time Trap is Real

Remember: a 40% crash happens, on average, every 6 years. That's 14 times in a lifetime. And you have no control over when those crashes occur.

If you're lucky, all 14 happen while you're working and contributing. Great: you weather the storm and maybe even benefit from dollar-cost averaging.

But if just one or two of those crashes land in your Red Zone, your retirement plan can fall apart. And the odds? They're not in your favor.

Wall Street's answer to this is always the same: "diversify," "rebalance," and "stay invested for the long term." And sure, diversification helps. A 60/40 stock-bond portfolio would have turned a brutal decade (2000–2009) into a modest gain instead of a catastrophic loss.

But here's the thing: you still don't know which decade you're retiring into. You can't predict the next crash. And once you're in the Red Zone, you don't have time to gamble on "long-term averages."

Wall Street Loves "Activity." You Need Certainty.

Let's talk about the advice machine for a second.

Wall Street makes money when you're active. They want you buying, selling, rebalancing, diversifying, and adjusting. Every transaction is a fee. Every "strategy adjustment" is a billable conversation. They profit from volatility because volatility creates the illusion that "doing something" equals progress.

But here's what they won't tell you: activity is not a strategy when you're running out of time.

When you're 55 or 60 or 65, you don't need another hot stock tip or a fancy asset allocation model. You need certainty. You need to know that no matter what the market does, your income is protected. You need a plan that doesn't depend on hoping you retire during the "right" decade.

That's where retirement income planning built on guarantees comes in. Instead of gambling on averages, you lock in a floor of income that can't disappear when the market tanks. You protect retirement savings from market crash exposure by taking the parts of your portfolio that fund your non-negotiable expenses and moving them out of the casino entirely.

Does this mean you give up all market growth? No. It means you stop betting your grocery money on whether 2027 is going to be a good year or a disaster.

The Math Wall Street Doesn't Want You to See

Here's another fun fact: if your portfolio drops 40%, you don't need a 40% gain to recover. You need a 67% gain just to get back to even.

Why? Because you're now working with a smaller base. A $1 million portfolio that drops 40% is now worth $600,000. To get back to $1 million, you need a $400,000 gain: which is 67% of $600,000.

And if you're pulling money out during that recovery period? Forget it. You're not recovering. You're just losing slower.

This is the math trap that kills retirement plans. Wall Street tells you "the market always comes back," and technically they're right: if you can afford to wait and you're not withdrawing. But retirees can't wait. They need income now. And every year spent waiting for a recovery is a year of depleting principal.

The Your Street Wealth Difference

At Your Street Wealth, we don't bet on averages. We build plans around guaranteed retirement income that you can count on whether the market is up, down, or sideways.

We call it rules-based planning, and it's built on one simple idea: your essential expenses should never be at risk.

Here's how it works:

1. Separate your needs from your wants. Housing, food, healthcare: these are non-negotiables. They get funded with certainty, not hope.

2. Lock in guarantees. Use tools like income annuities, fixed-index products, or other vehicles that remove sequence of returns risk from the equation.

3. Let the market work for your wants. Travel, gifts, legacy: these can ride the market because they're not mission-critical. If there's a crash, you delay the trip. You don't skip meals.

This approach means you're not one of the 14 victims who happen to retire during the wrong six-year window. You've built a plan that survives every crash because the foundation is unshakable.

Stop Hoping. Start Planning.

The 14-time trap is real. Market crashes happen, on average, every 6 years. You can't control when. You can't predict them. And if you're in your Red Zone when it hits, "staying the course" is a recipe for running out of money.

Wall Street's playbook was built for people with time. But you don't have 30 years to recover anymore. You need a plan built for certainty, not activity. You need income you can count on, not averages you have to hope for.

That's what we do.

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Keywords

Sequence of Returns Risk, Market Crash Protection, Retirement Planning, Average Returns Myth, Million Dollar Hour, Wealth Recovery.