See how the timing of market returns dramatically affects retirement portfolio longevity

The Sequence of Returns tool demonstrates how the timing of market gains and losses—especially early in retirement—can significantly impact portfolio longevity. By illustrating different return sequences with the same average performance, it helps highlight why risk management and income planning matter as much as long-term returns when drawing income in retirement.

⚠️ Educational Tool Disclaimer

This tool provides educational demonstrations only and is not financial advice. This simplified simulator shows three return sequence scenarios to illustrate sequence risk concepts. It does not provide comprehensive Monte Carlo analysis or account for all real-world variables. Actual market returns are unpredictable and unique to each time period. This tool does not constitute investment advice or retirement planning recommendations. Consult with qualified financial professionals to develop a comprehensive strategy that addresses sequence of returns risk.

Retirement Scenario

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Adjusted for inflation each year

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Used to create return sequences

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Understanding Sequence Risk

What is Sequence of Returns Risk?

Sequence of returns risk is the danger that poor market returns early in retirement can permanently damage portfolio longevity, even if long-term average returns are acceptable. The ORDER of returns matters as much as the average.

Why Timing Matters

When you're withdrawing money, a market downturn forces you to sell more shares to meet income needs. This "sells low" permanently reduces your share count. Recovery requires higher returns on fewer shares. Early losses + ongoing withdrawals = devastating combination.

The Critical First Decade

Research shows the first 10 years of retirement are crucial. Portfolios experiencing poor returns early often never recover, while those with strong early returns can withstand later volatility. This is the opposite of the accumulation phase where short-term downturns matter less.

Mitigation Strategies: Combat sequence risk through flexible spending (reduce withdrawals in down markets), cash reserves (2-3 years), guaranteed income sources, diversification across asset classes, and potentially delaying retirement if markets decline near your target date.

Three Sequence Scenarios

Same average return, dramatically different outcomes

Need Help Managing Sequence Risk?

Understanding sequence risk is critical for retirement success. Let's develop a strategy with flexible withdrawals, guaranteed income, and proper asset allocation to protect against early market downturns.

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Long Financial Services | Educational Tool

This simplified simulator demonstrates sequence of returns risk using three predetermined scenarios. It is not a comprehensive Monte Carlo analysis and does not account for taxes, fees, changing withdrawal needs, or other real-world complexities. Actual market returns are unpredictable and unique to each period. This tool is for educational demonstration only and should not be used for retirement planning decisions. Consult with qualified financial professionals to develop a comprehensive strategy that addresses sequence of returns risk through proper asset allocation, flexible spending strategies, and guaranteed income planning.

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