Sequence of Returns Calculator
How long your money lasts in retirement, and why the order of returns matters
Enter your savings and see how long they last
Free · No sign-up · Updates as you type
US$
What you retire with, e.g. 1,000,000.
US$
Fixed amount you live on, e.g. 50,000.
Applied every year, e.g. 5 for 5%.
How many years to model, e.g. 10.
Bad years first leaves US$ 727,918 after 10 years, good years first US$ 1,087,285
Same US$ 1,000,000, same US$ 50,000 taken out each year, the same yearly returns averaging 5.0%. Only their order changes, and that alone moves what is left by US$ 359,367. At a steady 5.0% every year you would have US$ 1,000,000. In all three cases your money lasts the 10 years.
The numbers behind that
Left after 10 years, same return every year
Every year your money earns exactly 5.0%, then you take out US$ 50,000. In year one your US$ 1,000,000 earns US$ 50,000, exactly what you take out, so your money stays where it is.
US$ 1,000,000
Left after 10 years, bad years first
The same returns in their worst order: -11.0% in year 1, rising evenly to 21.0% in year 10. They still average 5.0%.
US$ 727,918
Left after 10 years, good years first
The same returns in their best order: 21.0% in year 1, falling evenly to -11.0% in year 10.
US$ 1,087,285
How long your money lasts, steady return
With a return of 5.0% your US$ 1,000,000 earns US$ 50,000 a year. That is exactly the US$ 50,000 you take out, so your money never runs out.
it never runs out
How much you could take out
Click an option to jump to the field you would change.
At those amounts almost nothing is left after year 10. They come from this calculator's stress test, not from market history.
What bad years first and good years first mean here
Bad years first and good years first are this calculator's own stress test, not a forecast and not market history: 10 yearly returns spread evenly from -11.0% to 21.0%, averaging 5.0%, run once from worst to best and once from best to worst. No other order of those returns ends lower or higher. What you take out stays the same every year and is not raised for inflation. The effect has a name: sequence of returns risk.
How much you take out changes it
Same money, same return. Each row of the table uses a different yearly amount, and that amount stays the same every year. It is the one number you control.
| You take out each year | Left after 10 years, steady | Left with bad years first | With bad years first |
|---|---|---|---|
| US$ 30,000 | US$ 1,251,558 | US$ 1,057,957 | lasts the 10 years |
| US$ 40,000 | US$ 1,125,779 | US$ 892,938 | lasts the 10 years |
| US$ 50,000 (yours) | US$ 1,000,000 | US$ 727,918 | lasts the 10 years |
| US$ 60,000 | US$ 874,221 | US$ 562,898 | lasts the 10 years |
| Year | Return | Bad years first | Return | Good years first |
|---|---|---|---|---|
| 1 | -11.0% | US$ 840,000 | 21.0% | US$ 1,160,000 |
| 2 | -7.4% | US$ 727,467 | 17.4% | US$ 1,312,356 |
| 3 | -3.9% | US$ 649,176 | 13.9% | US$ 1,444,627 |
| 4 | -0.3% | US$ 597,012 | 10.3% | US$ 1,543,905 |
| 5 | 3.2% | US$ 566,249 | 6.8% | US$ 1,598,548 |
| 6 | 6.8% | US$ 554,629 | 3.2% | US$ 1,600,057 |
| 7 | 10.3% | US$ 561,940 | -0.3% | US$ 1,544,723 |
| 8 | 13.9% | US$ 589,987 | -3.9% | US$ 1,434,650 |
| 9 | 17.4% | US$ 642,907 | -7.4% | US$ 1,277,849 |
| 10 | 21.0% | US$ 727,918 | -11.0% | US$ 1,087,285 |
Same return every year
| Year | Return | Withdrawn | Balance |
|---|---|---|---|
| 1 | 5.0% | US$ 50,000 | US$ 1,000,000 |
| 2 | 5.0% | US$ 50,000 | US$ 1,000,000 |
| 3 | 5.0% | US$ 50,000 | US$ 1,000,000 |
| 4 | 5.0% | US$ 50,000 | US$ 1,000,000 |
| 5 | 5.0% | US$ 50,000 | US$ 1,000,000 |
| 6 | 5.0% | US$ 50,000 | US$ 1,000,000 |
| 7 | 5.0% | US$ 50,000 | US$ 1,000,000 |
| 8 | 5.0% | US$ 50,000 | US$ 1,000,000 |
| 9 | 5.0% | US$ 50,000 | US$ 1,000,000 |
| 10 | 5.0% | US$ 50,000 | US$ 1,000,000 |
The calculator runs your money three times. The first run uses your return the same every year, the simplest projection of money you are drawing from. The second and third runs use a set of up and down years that has the same average: one puts the bad years first, the other puts the good years first. Each year your money earns the return first, then your fixed withdrawal is taken out at year-end.
balance = balance × (1 + return) − withdrawal
Because the return is earned before the withdrawal is taken, a steady return that exactly covers your withdrawal holds the balance flat, e.g. 5% on 1,000,000 earns 50,000 and you take 50,000, so you stay at 1,000,000. If a year cannot fund the withdrawal, the portfolio is marked as run out and the balance is zero from then on.
Step 1: Enter your starting portfolio and the fixed amount you plan to withdraw each year.
Step 2: Set your yearly return and the number of years. The result compares that return applied steadily with the same average arriving as bad years first and as good years first.
What Is Sequence of Returns Risk?
Sequence of returns risk is the risk that the order your investment returns arrive in, not just their long-run average, decides whether your portfolio lasts through retirement. While you are still saving and not withdrawing, the order is irrelevant: a portfolio left untouched compounds to the same final value no matter which years were good and which were bad. The moment you start taking fixed withdrawals, the order suddenly matters enormously.
The reason is simple. When you withdraw a fixed amount each year and the market has just fallen, that withdrawal is a larger slice of your shrunken portfolio. You sell more of your holdings to fund the same lifestyle, permanently reducing the base that would otherwise have recovered in the rebound. A retiree who hits a steep loss in their first year can run out of money years earlier than an identical retiree who met that same loss near the end, even though both earned the exact same average return.
How This Calculator Works, With a Worked Example
The calculator is deterministic rather than a Monte Carlo simulation, so the results are exact, not probabilistic. Each year your money earns the return first, then your fixed withdrawal is taken out at year-end, using balance = balance × (1 + return) − withdrawal. The calculator runs your money three times: once with your return the same every year, once with the bad years first and once with the good years first. The last two runs use the same set of up and down years, which has the same average as your return.
Here is a small worked example of the order effect. Start with a 100,000 portfolio, withdraw 10,000 at the end of each year, and earn +30%, 0%, then -30%. Year one: 100,000 x 1.30 - 10,000 = 120,000. Year two: 120,000 x 1.00 - 10,000 = 110,000. Year three: 110,000 x 0.70 - 10,000 = 67,000. The portfolio ends at 67,000.
Now reverse the order to -30%, 0%, +30% and change nothing else. Year one: 100,000 x 0.70 - 10,000 = 60,000. Year two: 60,000 x 1.00 - 10,000 = 50,000. Year three: 50,000 x 1.30 - 10,000 = 55,000. The portfolio ends at 55,000, a full 12,000 lower than the first order, despite an identical average. The only thing that changed was the order, and the early loss did the damage.
Why Withdrawals Turn One Average Into a Range of Outcomes
While you are still saving, a bad run early on does far less harm, because most of your money has not gone in yet. Once you start taking money out, it is the other way round. Money you take out after a fall is no longer invested, so it cannot grow back when the good years come. The more you take out compared with what you have, the harder a bad start hits.
This is why the amount you take out each year matters so much. A higher yearly amount leaves far less room for a bad run of opening years, and a lower one leaves more. Use the calculator above to raise or lower your withdrawal and watch what is left with the bad years first change.
How to Manage Sequence of Returns Risk
You cannot remove sequence risk entirely, but several habits reduce it. Holding the money for some of your spending in cash or short-term bonds lets you avoid selling shares right after a drop. That money is sometimes called a cash buffer. A flexible approach that trims spending in down years protects the base when it is most fragile. A lower starting withdrawal and a globally diversified portfolio both add resilience. Since a fall does the most damage early on, while most of your money is still there to lose, the first years deserve the most caution.
Earning a little income in the early years is one of the most effective defences, because it directly cuts how much you must withdraw from a depressed portfolio. That is the structural advantage behind semi-retirement. Our Barista FIRE calculator shows how part-time income lowers the portfolio you need and cushions the riskiest years. To turn a withdrawal rate into a target portfolio in the first place, the present value calculator is a useful companion.
While you are still saving, a bad run early on does far less harm, because most of your money has not gone in yet. That is one reason steady, automated investing suits the years in which you build the portfolio you will later draw from. Our compound interest calculator and dollar-cost averaging calculator both model how steady contributions grow a portfolio before retirement begins.
Frequently Asked Questions About Sequence of Returns Risk
Sequence of returns risk is the danger that the ORDER your returns arrive in, not just their average, decides whether your money lasts. It bites only while you are taking money out, such as in retirement. A run of bad years early, on top of your withdrawals, shrinks the capital base so the later good years have far less left to grow. Two retirees with the very same average return can end up worlds apart purely because of the order.
If you never touch the money, order changes nothing: a portfolio left alone ends at the same value whatever order the returns came in. The order only bites because withdrawals interact with it. Money you take out after a fall is a bigger slice of a smaller pot, so it locks in the loss and leaves less to recover in the rebound. Good early years let you draw from a bigger base and keep more invested.
It is deterministic, not a random Monte Carlo, so the numbers are exact and repeatable. Each year your money earns the return, then your fixed withdrawal is taken out at year-end: balance = balance × (1 + return) − withdrawal. The calculator runs your money three times: once with your return the same every year, once with the bad years first and once with the good years first. The last two runs use the same set of up and down years, which has the same average as your return.
Keep the money for some of your spending in cash or short bonds, so you are not forced to sell shares straight after a fall. That money is sometimes called a cash buffer. Trim spending in down years instead of withdrawing a fixed sum. Start with a lower withdrawal, stay diversified, and be most careful in the early years, when a fall does the most damage. Earning a little income early in retirement also cuts how much you must pull from a depressed portfolio.
Yes. The more you take out relative to what you have, the more damage bad early years do, because you are selling a bigger share of a shrinking base. A smaller yearly amount survives a rough start far better than a larger one. Try raising the amount you take out in the calculator above and watch what is left with the bad years first fall.
Follow Your Retirement Portfolio Over Time
This calculator shows what could happen, not what you have today. With a free Worthmap account, you can record what you own, each asset in its own currency, and see your net worth in one base currency over time. The free account is in beta.
Create free accountBuilt & maintained by Worthmap · Last updated October 4, 2026
Educational use only. This tool provides estimates for informational purposes and does not constitute financial, investment, tax, or legal advice. Results are based on inputs you provide and mathematical models, they do not guarantee future performance. Always consult a qualified financial adviser before making investment decisions.