Compare the order of early retirement returns

The same market returns can fund different retirements

Sequence risk comparison asks what happens when the losses arrive first instead of later. It applies five annual stock returns and their exact reverse to the same saved retirement plan. Without cash flows, both orders produce the same compounded stock return. With withdrawals, early losses can leave less invested capital available to participate in a recovery.

Use this after checking the ordinary Test Market Uncertainty baseline. A weak comparison can prompt a review of reserves, spending flexibility, retirement timing, or allocation, but it is not an instruction to trade. Even when both orders succeed, downside balances or the amount of spending sacrificed can differ materially.

Choose an illustrative preset or enter five returns

The comparison starts Off. Moderate uses -15%, -5%, +5%, +8%, +10%. Severe uses -25%, -10%, +5%, +8%, +10%. Extreme uses -40%, -20%, 0%, +8%, +10%. Each preset displays Losses first and Losses later. These labels describe illustrative stresses, not forecasts or calibrated market probabilities.

Custom compares five annual stock returns between -100% and +100% in your entered order with their reverse. Use it to test a pattern the presets do not cover. Review the preview and equal cumulative stock returns before running so return order is the deliberate difference.

Both orders use the same fixed bond and cash returns during the five years, initially 2% and 3%. You can change these values. Individual bonds retain their contractual coupon and maturity cash-flow rules rather than receiving a bond-fund market-return override.

The comparison adds two matched sets of trials

In Test Market Uncertainty, Apply for next run updates the draft, while Cancel restores it. Save & run analysis saves the settings and starts the background job. In Compare Plans, select the sequence under shared assumptions before starting the job. Each order uses the selected precision for every analyzed plan. All paths count toward the access-level limit; choose a lower precision or turn the sequence comparison off if necessary.

The pair uses the same seed and run indexes, identical inflation and expense shocks, and matching market returns outside the five-year window. The window begins at the primary person’s modeled retirement year, or the first modeled year if already retired. The selected lifespan horizon must contain all five years.

Sustained early-market stress is separate. It changes the primary analysis by repeating one stock, bond, and cash return for the selected number of retirement years; the existing Bad first 5 years sensitivity is also that sustained-downturn test. The paired return-order cases use their displayed five-year patterns instead, while the primary analysis keeps its own stress settings.

Read success alongside the cost of remaining successful

For one plan, open the Sequence risk result tab after completion. It shows both annual return orders, their cumulative stock return, plan success, ending balance p10, median ending balance, maximum drawdown, lifetime spending cuts, and the median first shortfall year among paths with a shortfall. Plan tradeoffs instead shows success and ending p10 for both orders and their differences for every selected plan.

The displayed success and ending-p10 changes are the first order minus the reverse order. A negative difference means the first order has a lower statistic. These are differences between summary statistics, not percentiles of individual paired differences. Success is conditional on each forced sequence; it is not the probability of that market sequence happening.

Selected Bad-market response and guardrail rules remain active. They may cut spending at different times under the two orders, including the year after the five-year window. A successful plan that relies on large spending reductions is not equivalent to one that sustains the original lifestyle. Fast precision and small success differences are exploratory.

Change one planning response and compare again

Save a reserve, allocation, or spending-policy change in a What-if, then use Compare Plans with one shared sequence, seed, horizon, and other assumptions. It runs the pair for the main plan and every selected What-if, making their sensitivity to order directly comparable. The tool does not rank remedies or automatically apply a policy change.

Saved results retain their own preset, annual returns, dates, bond and cash assumptions, response settings, and outcomes. Reloading a result does not repeat its simulations. Editing the next-run draft does not relabel the saved comparison; run the analysis again to produce results for new settings.

A five-year stress is an experiment, not a market prediction

The comparison is available in Test Market Uncertainty and Compare Plans with sequence-risk access for Forward assumptions, including fat-tail stress, and Historical experience. Compare Plans also retains the separate Sustained early-market stress controls. Economic regimes does not support the paired sequence comparison.

This is an annual planning model, not a date-exact retirement cash-flow forecast or a search over every possible return order and crash date. Keep the ordinary unstressed baseline in view. Taxes, changing allocations, withdrawals, and spending responses all contribute to how the saved plan reacts to the ordering.

What if the market drops right after retirement?

Create an Early-return stress What-if and enter a loss and duration you can explain. Compare that plan with the main plan while keeping spending, retirement dates, income, and later return assumptions aligned. This shows how early losses interact with withdrawals rather than assuming the same average return is harmless in every order.

Trace the first stressed years: which assets are sold, whether cash is depleted, how taxes respond, whether the portfolio recovers, and when spending reductions or shortfalls begin. If available for the account, Compare return orders in Test Market Uncertainty adds a controlled sequence-risk comparison across matching return sets.

A forced downturn is a resilience test, not a market forecast. Compare more than one severity and recovery pattern before changing allocation, reserve policy, or retirement timing.