Sequence of Returns Risk Calculator
Test Sequence Scenarios
Compare different return sequences
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Formula
Impact = Portfolio(Good Sequence) - Portfolio(Bad Sequence)
Frequently Asked Questions
Why does sequence of returns matter?
When you withdraw from a falling portfolio, you sell low. Those shares never recover. $100 withdrawn when market is down costs more in foregone gains than $100 withdrawn when market is up.
Can I avoid sequence risk?
Partially: keep 2-3 years expenses in cash, use bond/stock allocation that adjusts with age, or reduce withdrawals during downturns. Some risk is unavoidable.
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