Sequence Of Returns Comparison
Calculator
Results
- Ending balance
- $0.00
- Cost of sequence risk
- $1,286,854.15
- Total withdrawn
- $752,002.15
- Years funded
- 21 yr
Portfolio balance path
- Ending balance
- Cumulative withdrawn
Year-by-year portfolio projection
| 1 | 37,500.00 | -57,000.00 | 655,500.00 | 37,500.00 |
| 2 | 37,500.00 | -49,440.00 | 568,560.00 | 75,000.00 |
| 3 | 37,500.00 | -42,484.80 | 488,575.20 | 112,500.00 |
| 4 | 37,500.00 | -36,086.02 | 414,989.18 | 150,000.00 |
| 5 | 37,500.00 | -30,199.13 | 347,290.05 | 187,500.00 |
| 6 | 37,500.00 | 24,783.20 | 334,573.25 | 225,000.00 |
| 7 | 37,500.00 | 23,765.86 | 320,839.11 | 262,500.00 |
| 8 | 37,500.00 | 22,667.13 | 306,006.24 | 300,000.00 |
| 9 | 37,500.00 | 21,480.50 | 289,986.74 | 337,500.00 |
| 10 | 37,500.00 | 20,198.94 | 272,685.68 | 375,000.00 |
| 11 | 37,500.00 | 18,814.85 | 254,000.54 | 412,500.00 |
| 12 | 37,500.00 | 17,320.04 | 233,820.58 | 450,000.00 |
| 13 | 37,500.00 | 15,705.65 | 212,026.22 | 487,500.00 |
| 14 | 37,500.00 | 13,962.10 | 188,488.32 | 525,000.00 |
| 15 | 37,500.00 | 12,079.07 | 163,067.39 | 562,500.00 |
| 16 | 37,500.00 | 10,045.39 | 135,612.78 | 600,000.00 |
| 17 | 37,500.00 | 7,849.02 | 105,961.80 | 637,500.00 |
| 18 | 37,500.00 | 5,476.94 | 73,938.75 | 675,000.00 |
| 19 | 37,500.00 | 2,915.10 | 39,353.85 | 712,500.00 |
| 20 | 37,500.00 | 148.31 | 2,002.15 | 750,000.00 |
| 21 | 2,002.15 | 0.00 | 0.00 | 752,002.15 |
| 22 | 0.00 | 0.00 | 0.00 | 752,002.15 |
Comparison
| Scenario | Ending balance | Total withdrawn | Years funded |
|---|---|---|---|
| Baseline scenario | 1,286,854.15 | 1,125,000.00 | 30.00 |
| Selected scenario | 0.00 | 752,002.15 | 21.00 |
Formula
same returns, reordered: Bₜ = (Bₜ₋₁ − W)(1 + rₜ)= 1286854.15
Note
This is not financial advice. It is a simplified model: it applies the displayed formula to the figures you entered, uses a single constant rate for every year unless you supplied more, and ignores taxes, fees, product charges and any country's specific pension, benefit or minimum-distribution rules. Sequence-of-returns risk and longevity risk are real: a run of poor early years can exhaust a portfolio that the average return alone calls safe, and living longer than projected is the risk this page cannot price. Real returns can be negative. Consult a licensed adviser before acting on any figure here.
More in Retirement drawdown
See all →Frequently asked questions
What is sequence-of-returns risk?+
It's the risk that the order in which you experience investment returns matters, not just the average return. Two retirees with the identical average return over 25 years can end up with very different outcomes if one hits a market crash in year one and the other in year twenty.
Why does an early downturn hurt more than a later one?+
Because withdrawals are taken from a shrinking balance during the downturn, you're forced to sell more shares at depressed prices early on, leaving less capital to benefit from the eventual recovery. A crash late in retirement, with a smaller remaining balance being withdrawn from, does less cumulative damage.
How does this calculator show that risk?+
It typically compares two or more return sequences with the same average but different ordering — for example, bad years first versus bad years last — against the same withdrawal schedule, so you can see the ending balances diverge even though the average return is identical.
What can I actually do to reduce sequence risk?+
Common approaches include holding a cash or bond buffer to avoid selling stocks in a downturn, reducing withdrawals temporarily after a bad year, or using a more flexible spending rule instead of a fixed inflation-adjusted amount. This calculator is for illustrating the risk, not prescribing which fix to use.
Is sequence risk only relevant right at retirement?+
It's most dangerous in the first 5-10 years of retirement, because that's when withdrawals are being taken from the largest remaining time horizon and any losses compound against decades of future withdrawals. Once well into retirement with a smaller remaining horizon, the same shock does comparatively less damage.