“A Lost Decade Is a Very Real Possibility,” Says Ultra-High Net Worth Financial Advisor

Adam Grossman tells a story that has stayed with him since boyhood. “I remember once I was at my grandparents’ house and this older fellow came in,” he said on Morningstar’s The Long View podcast with host Christine Benz. “After he left, my father explained that he had been my grandfather’s accountant. And… something had gone wrong with his financial plan. And he had to go back to work… in his 70s.”

That image became the foundation of how Grossman thinks about retirement risk. The real danger is the cruel arithmetic of withdrawing from a portfolio while markets are falling, a problem academics call sequence-of-returns risk.

The Defense: Five to Seven Years in Bonds and Cash

Grossman’s prescription is straightforward. “The simplest way, an investor’s best defense is through asset allocation. So if you have 5 years or 7 years of withdrawal set aside in bonds and cash, then even if you happen to retire at the worst possible time, that your plans will not be negatively impacted and you won’t end up like that fellow having to go back to work in your 70s.”

The math behind the advice is more compelling now than it has been in years. The 10-year Treasury yield closed at 4.45% on May 28, 2026, sitting near the 91.1th percentile of its 12-month range. A retiree building a bond ladder today can lock in meaningful real income, something that was effectively impossible during the zero-rate decade that ended in 2022. The 12-month yield range stretched from a low of 3.97% in February 2026 to a high of 4.67% on May 19, 2026, so income buyers still have a workable entry point.

The Real Risk He Sees: A Lost Decade

Benz asked Grossman about the biggest risk facing new retirees. He waved off the most popular answer. Social Security solvency worries, in his view, “it’s not a red state or a blue state issue” because beneficiaries live in every district. Washington will negotiate something. The trustees project the OASI trust fund will be exhausted in 2033, with the broader program facing a $26.1 trillion funding gap over the next 75 years. A fix will likely combine modest benefit changes with revenue increases.

What actually worries him is a stretch of nothing. “I think there could be a lost decade. I think that that’s a very, very real possibility,” Grossman said. He doesn’t see today’s market as stretched as the dot-com peak, but he warns that “investors can be reasonable in assuming… returns in line with historical averages over the long term… but they should be prepared for negative returns, or at least… a period of flat returns for a period of years.”

There is precedent worth respecting. From January 3, 2000 through December 31, 2010, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY | SPY Price Prediction) lost 13.54% on a price basis, with two bear markets bookending the period. A retiree who began withdrawals at the start of that stretch with no cash buffer was forced to sell shares into both selloffs.

The Backdrop Matters

The current environment is the kind that lulls investors into skipping the defense. The VIX closed at 15.32 on May 29, 2026, in what the index’s own framework calls a complacency zone. The S&P 500 ETF is up 28.21% over the past year and 260.5% over the past decade. After runs like that, holding seven years of spending in bonds feels expensive.

That feeling is precisely the problem Grossman is naming. The accountant in his grandfather’s living room presumably felt the same way once. You can read the full conversation and listen to the episode at Morningstar’s The Long View. The defense only works if it’s already built when the bear shows up.