Sequence of Returns Risk Calculator
See why the order of market returns matters as much as the average — and how an early bear market can devastate a retirement portfolio with the same long-run average return.
How would you like to start?
Use the calculator independently, or prefill compatible information from one of your saved retirement plans.
Your retirement scenario
Both scenarios match this long-run geometric average.
Return during each bear year.
What is sequence of returns risk?
Sequence of returns risk is the danger that poor investment returns early in retirement will permanently impair a portfolio — even if long-run average returns are good. When you're withdrawing from a portfolio, bad early returns combined with withdrawals create a compounding negative effect that good later returns can't fully recover from.
Why it's unique to the distribution phase
During the accumulation phase (while saving), a bad 5-year stretch followed by a good 5-year stretch produces the same terminal wealth as having the good years first. But in retirement — when you're taking money out — withdrawals during a down market sell more shares at lower prices, leaving fewer shares to benefit when markets recover.
See the Sequence of Returns Risk methodology for the synthetic three-scenario model, the compensating-return formula, and why this is not a Monte Carlo or historical simulation.
🏛 Official Government Resources
- SEC investor.gov: Investor Bulletin — Market Volatility ↗ — How to respond to market downturns without sabotaging your long-term retirement plan.
- SEC investor.gov: Introduction to Investing ↗ — SEC education on risk, diversification, and long-term investing principles relevant to managing sequence risk.