Sequence of Returns Risk Calculator

Sequence of Returns Risk Calculator

Simulation Results: Comparison of 1990 and 2000 Start Years (Age 65 to 100)

Retirement Starting at Age 65 (Year 1990)

Age Year S&P 500 Return (%) Start Balance ($) Withdrawal ($) End Balance ($)

Retirement Starting at Age 65 (Year 2000)

Age Year S&P 500 Return (%) Start Balance ($) Withdrawal ($) End Balance ($)

Risk Management Recommendation

To reduce the risk of running out of money due to a negative sequence of returns in early retirement, consider using the Rule of 100. This involves transferring a portion of your portfolio into principal protection programs such as Fixed Index Annuities (FIAs) or Indexed Universal Life (IUL) policies. These programs allow for market growth while providing principal protection when markets decline. By taking income from these protected assets during market downturns, you can avoid selling investments at a loss and extend the longevity of your retirement funds.