Firenum Study Finds One Retirement Mistake Can Triple the Risk of Outliving Savings
UNITED STATES – August 17, 2026 – A new analysis from Firenum examining 154 years of historical market data finds that one common retirement-investing mistake—selling stocks after a market decline and buying back later—can significantly increase the risk of running out of retirement savings.
According to the analysis published by “firenum.com/blog/is-a-financial-advisor-worth-it retirees who remained invested through market downturns experienced substantially higher historical retirement success rates than those who incurred a 1.5% annual “behavior gap,” representing the potential cost of selling during declines and buying back at higher prices.
The analysis replayed every 30-year retirement period available in the Shiller S&P 500 dataset beginning in 1871. Retirees who remained invested through market downturns had a historical success rate of 90.5%, compared with 71.5% for retirees whose returns were reduced by a 1.5% annual behavior gap.
The difference becomes more pronounced over longer retirement periods. For a 40-year retirement horizon, representative of individuals who leave the workforce in their mid-40s, the analysis found a historical success rate of approximately 73% for investors who remained invested. Applying the 1.5% behavior gap reduced the success rate to approximately 49%.
When the behavior gap changed the outcome, the analysis found that the affected retirement portfolio was depleted a median of four years earlier.
Advisor Fees Can Affect the Value of Behavioral Guidance
The Firenum analysis also examines the relationship between behavioral guidance and financial-advisor fees.
Research from Vanguard has previously identified behavioral coaching as an important component of the potential value provided by financial advisors, particularly helping investors maintain an appropriate investment strategy during periods of market volatility. Dalbar’s annual investor-return research has likewise highlighted the impact of investor behavior on realized investment returns.
Firenum’s analysis applies the 1.5% behavior-gap assumption specifically to longer retirement horizons and examines how the cost of financial advice can affect the potential benefit of behavioral guidance.
For example, a 1% assets-under-management fee on a $1 million portfolio represents $10,000 per year before considering portfolio growth. Because an assets-based fee increases as the portfolio value grows, the cumulative cost can materially reduce the potential financial benefit associated with behavioral guidance.
By comparison, flat-fee or hourly financial-advisory arrangements do not automatically increase with portfolio size, allowing investors to evaluate advisory costs separately from the amount of assets being managed.
“We make planning software, so people expect us to say you don’t need an advisor. The numbers say otherwise. Staying invested through a crash is worth more than any feature we could build, and the fairest way to pay for that help is a flat fee,” said the team behind Firenum.
Planning for Market Downturns
Firenum says the findings underscore the importance of having a retirement strategy that investors can follow during periods of significant market volatility.
For do-it-yourself retirement planners, the company recommends developing a written investment and withdrawal plan and stress-testing the strategy against severe market declines before they occur. Having a predetermined strategy may help investors avoid making emotionally driven decisions during a downturn.
For investors seeking professional assistance, the analysis highlights fee structures as another factor to consider when evaluating financial-advisory services, including flat-fee and hourly arrangements.
The full analysis and methodology are available at “Firenum’s retirement-advisor analysis” (firenum.com/blog/is-a-financial-advisor-worth-it).
About Firenum
Firenum is a free retirement planning tool offering Monte Carlo simulation, historical backtesting, and stress-testing capabilities. The company says its calculations run in the browser without requiring users to provide personal financial account information.
For more information, visit “firenum.com/blog/is-a-financial-advisor-worth-it.
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Company Name: Firenum
Contact Person: Mikulas
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Country: United States
Website: https://firenum.com/
