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If you’ve been building your nest egg for a while, you’ve seen markets go up and down. But if you’re close to retirement—or already there—a significant loss can be quite painful. That’s because simple arithmetic makes any investment loss tougher to recover from. In percentage terms, the more you lose, the harder it becomes to break even. Therefore, as you near retirement, protecting against losses should be one of your main priorities.

Investment Losses Are Tough, But Breaking Even Can Be Tougher

Below are the gains you’d need to make up for three different loss amounts on a $100,000 initial investment.

Recouping a loss becomes even tougher if you’re taking annual distributions and no longer adding to your principal.

Cumulative Gain Required to Return to Break Even When Taking 4% Annual Withdrawals

Past performance does not guarantee future results. Investing involves risk, including the possible loss of principal.

The charts above are for illustrative purposes only. The catch-up percentage gains shown in the second chart assume a hypothetical investor opts to take a consistent $4,000 annual distribution for five consecutive years, based on a $100,000 retirement nest egg. The percentages in the downward-facing gray arrow each represent a one-time investment loss over the five-year period of distributions. Source: Hartford Funds

Whether you're nearing retirement or already in it, your financial professional can help you manage risk prudently.


This material is provided for educational purposes only.


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The material on this site is for informational and educational purposes only. The material should not be considered tax or legal advice and is not to be relied on as a forecast. The material is also not a recommendation or advice regarding any particular security, strategy or product. Hartford Funds does not represent that any products or strategies discussed are appropriate for any particular investor so investors should seek their own professional advice before investing. Hartford Funds does not serve as a fiduciary. Content is current as of the publication date or date indicated, and may be superseded by subsequent market and economic conditions.

Investing involves risk, including the possible loss of principal. Investors should carefully consider a fund's investment objectives, risks, charges and expenses. This and other important information is contained in the mutual fund, or ETF summary prospectus and/or prospectus, which can be obtained from a financial professional and should be read carefully before investing.

Mutual funds are distributed by Hartford Funds Distributors, LLC (HFD), Member FINRA|SIPC. ETFs are distributed by ALPS Distributors, Inc. (ALPS). Advisory services may be provided by Hartford Funds Management Company, LLC (HFMC) or its wholly owned subsidiary, Lattice Strategies LLC (Lattice). Certain funds are sub-advised by Wellington Management Company LLP and/or Schroder Investment Management North America Inc (SIMNA). Schroder Investment Management North America Ltd. (SIMNA Ltd) serves as a secondary sub-adviser to certain funds. HFMC, Lattice, Wellington Management, SIMNA, and SIMNA Ltd. are all SEC registered investment advisers. Hartford Funds refers to HFD, Lattice, and HFMC, which are not affiliated with any sub-adviser or ALPS. The funds and other products referred to on this Site may be offered and sold only to persons in the United States and its territories.

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