Many people who retired in 2000 thought they were in great shape: over the previous twenty years, stocks returned 17.8% on average.

More modest returns were expected for the next decade, but few would have bet stocks would actually go down—that had occurred only about 5% of the time over rolling 10-year periods since 1926. Then came two ferocious bear markets. Retirees in 2000 who had a 89% chance of living on their retirement income for the next thirty years saw their prospects plunge.

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