# Sequence of Returns Risk

*Retirement & Benefits — Finicade finance glossary*

Sequence of returns risk is the danger that poor returns arrive early in retirement, when withdrawals are compounding the damage. Two retirees can experience identical average returns over thirty years and end with wildly different outcomes purely because of the order — selling assets in a crash permanently removes shares that would have recovered. It's why risk should fall as you approach the withdrawal phase and why a cash buffer matters most in the first five years.

**Also known as:** sequence risk, order of returns risk

**Related terms:** [Safe Withdrawal Rate](https://finicade.com/glossary/safe-withdrawal-rate), [Glide Path](https://finicade.com/glossary/glide-path), [Bucket Strategy](https://finicade.com/glossary/bucket-strategy), [Drawdown](https://finicade.com/glossary/drawdown), [Longevity Risk](https://finicade.com/glossary/longevity-risk)

Source: https://finicade.com/glossary/sequence-of-returns-risk