Sequence-of-returns risk · the timing nobody controls
What if you retire the year before a crash?
A bad run of returns just as you start drawing income does far more damage than the same crash ten years later: the same average return, a different outcome. See what could happen to your plan when the worst years land first.
Illustration only, not regulated financial advice. One pot drawn down at this rate, with two identical sets of yearly returns (two crash years among 28 good) in a different order. Same average, only the timing differs. Other income is set aside to isolate the effect. Plan to age 97. Modelled on a 60/40 equity and cash mix: equities at 4.5% and cash at 0.5% a year above inflation before charges, with 15% equity volatility, less 0.75% charges, across 2,000 simulated futures in today’s money. Assumptions, not forecasts.
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