Inputs
Retirement Risk
Sequence of Returns Risk Calculator
Compare how the order of annual returns can change a retirement portfolio, even when the average return is similar.
Sequence riskRetirement drawdownInflation-awareScenario comparison
Results
Ending balance
$2,158,929
Ending balance in today's dollars
$1,215,720
Total withdrawn
$1,622,723
Years supported
30
Depletion year
Not depleted
Ending-balance difference
$2,158,929
Annual projection
| Year | Return | Start balance | Growth | Withdrawal | End balance |
|---|---|---|---|---|---|
| 1 | 16.50% | $1,000,000 | $165,000 | $40,000 | $1,125,000 |
| 2 | 15.71% | $1,125,000 | $176,703 | $40,800 | $1,260,903 |
| 3 | 14.91% | $1,260,903 | $188,048 | $41,616 | $1,407,335 |
| 4 | 14.12% | $1,407,335 | $198,725 | $42,448 | $1,563,612 |
| 5 | 13.33% | $1,563,612 | $208,392 | $43,297 | $1,728,707 |
| 6 | 12.53% | $1,728,707 | $216,684 | $44,163 | $1,901,228 |
| 7 | 11.74% | $1,901,228 | $223,230 | $45,046 | $2,079,412 |
| 8 | 10.95% | $2,079,412 | $227,660 | $45,947 | $2,261,124 |
| 9 | 10.16% | $2,261,124 | $229,621 | $46,866 | $2,443,879 |
| 10 | 9.36% | $2,443,879 | $228,798 | $47,804 | $2,624,872 |
| 11 | 8.57% | $2,624,872 | $224,924 | $48,760 | $2,801,037 |
| 12 | 7.78% | $2,801,037 | $217,805 | $49,735 | $2,969,107 |
| 13 | 6.98% | $2,969,107 | $207,326 | $50,730 | $3,125,703 |
| 14 | 6.19% | $3,125,703 | $193,470 | $51,744 | $3,267,429 |
| 15 | 5.40% | $3,267,429 | $176,328 | $52,779 | $3,390,978 |
| 16 | 4.60% | $3,390,978 | $156,102 | $53,835 | $3,493,245 |
| 17 | 3.81% | $3,493,245 | $133,105 | $54,911 | $3,571,438 |
| 18 | 3.02% | $3,571,438 | $107,759 | $56,010 | $3,623,188 |
| 19 | 2.22% | $3,623,188 | $80,585 | $57,130 | $3,646,643 |
| 20 | 1.43% | $3,646,643 | $52,185 | $58,272 | $3,640,555 |
| 21 | 0.64% | $3,640,555 | $23,224 | $59,438 | $3,604,341 |
| 22 | -0.16% | $3,604,341 | -$5,593 | $60,627 | $3,538,122 |
| 23 | -0.95% | $3,538,122 | -$33,551 | $61,839 | $3,442,731 |
| 24 | -1.74% | $3,442,731 | -$59,951 | $63,076 | $3,319,704 |
| 25 | -2.53% | $3,319,704 | -$84,137 | $64,337 | $3,171,229 |
| 26 | -3.33% | $3,171,229 | -$105,525 | $65,624 | $3,000,080 |
| 27 | -4.12% | $3,000,080 | -$123,624 | $66,937 | $2,809,519 |
| 28 | -4.91% | $2,809,519 | -$138,054 | $68,275 | $2,603,190 |
| 29 | -5.71% | $2,603,190 | -$148,561 | $69,641 | $2,384,987 |
| 30 | -6.50% | $2,384,987 | -$155,024 | $71,034 | $2,158,929 |
Scenario comparison
The generated sequences use the same average-return assumption; their order differs.
Rising then falling
$2,158,929
Falling then rising
$0
Need a change for Sequence of Returns Risk Calculator?
About this calculator
Method, formulas, and limits.What this does
Compares rising-then-falling and falling-then-rising return sequences using the same average-return assumption, annual withdrawals, and inflation setting.
Who it is for
People exploring why retirement outcomes depend on when gains and losses occur, alongside a broader retirement-income plan.
How it works
Each year applies the selected return to the starting balance and then subtracts the planned withdrawal. Withdrawals can increase with inflation, and the model reports both nominal and today-dollar balances.
Limitations
This is a deterministic educational comparison, not a market forecast or probability-of-success analysis. It excludes taxes, fees, asset allocation, valuation changes, and dynamic spending rules.
Key calculations
- Annual growth
- growth = startBalance × annualReturn
- Inflation-adjusted withdrawal
- withdrawalInYearN = firstWithdrawal × (1 + inflation)^(N − 1)
- Ending balance
- endBalance = max(0, startBalance + growth − withdrawal)
Reference ranges
- Early losses
- Losses near the beginning of retirement can reduce the capital available for later recovery while withdrawals continue.
- Same average, different path
- Two return sequences can share an average return but produce different outcomes because withdrawals interact with each year's balance.
- Inflation-aware planning
- Increasing withdrawals preserve a spending target more closely in nominal terms but place additional pressure on the portfolio.
How to use it
- 1.Enter the portfolio and withdrawalProvide the starting retirement portfolio and planned first-year withdrawal.
- 2.Set the horizon and inflationChoose the number of years and whether withdrawals should rise with inflation.
- 3.Choose a return sequenceCompare generated rising-then-falling and falling-then-rising sequences, or enter custom annual returns.
- 4.Review the differenceCompare ending balances, depletion years, cumulative withdrawals, and the annual projection table.
It is the risk that the order of investment returns affects a withdrawing portfolio. Early losses can be especially damaging because withdrawals remove assets before a later recovery.
No. The generated sequences are deterministic teaching scenarios, and custom returns are whatever values you enter. They are not predictions of future market performance.
Withdrawals occur throughout the sequence. Selling after an early loss leaves fewer shares or dollars available to participate in later gains, so order matters even when arithmetic averages match.
No. Taxes, investment fees, asset allocation, changing spending, and other personal retirement rules are outside this first version.
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