🌪️ Sequence risk

Retirement Market-Crash Stress Test

A large decline in the first retirement year can have a very different impact from the same decline after several strong years.

Calculator inputs

Portfolio at retirement start

First-year monthly portfolio withdrawal

One-time early-retirement decline scenario

Assumed annual return after the decline (%)

Annual withdrawal growth / inflation (%)

Simulation years

Portfolio remaining at simulation end

—

Portfolio after initial decline—

Portfolio after year 10—

Portfolio after year 20—

Depletion time—

This is a scenario model, not a promise that a portfolio can sustain a given withdrawal rate or return. Taxes, inflation, longevity, healthcare, market paths and pension rules can materially change outcomes.

This is a sequence-of-returns stress test

Before retirement, ongoing earnings and contributions can help absorb market declines. During retirement, selling assets while the portfolio is down can permanently reduce the amount available for a later recovery.

Do not treat it as a market forecast

The model deliberately simplifies the path to one initial decline followed by a constant return. Real markets move unevenly, so use the output as a stress scenario rather than a longevity guarantee.

How to use it

Compare -20%, -30% and -40% shocks, then test lower long-term returns or higher inflation. If assets deplete quickly, revisit spending, cash reserves, defensive assets, retirement timing and withdrawal flexibility.