Stack a market's yearly returns one way and your savings ride out a long retirement; reverse them — same returns, same averageThe arithmetic mean of the yearly returns. It's identical across all three orderings here — only the sequence differs — so any gap between them is sequence risk, nothing else. — and the pot runs dry years sooner. The villain is sequence-of-returns riskSequence-of-returns risk: when you're drawing money down, a bad run early — while the balance is largest — does far more damage than the same bad run later. While you're saving, the order doesn't matter; while you're spending, it's decisive., and it only bites once you start withdrawing. The mirror image of compound growth, where order never matters at all.
Best-first never runs dry; worst-first quits at 17. The identical returns, merely reshuffled, are worth 13 years of retirement.
All three lines live through the very same returns — only the order changes. Worst-first and best-first are the two extremes, the envelope of what order alone can do; a real run lands somewhere between. Without withdrawals they'd all end at the identical balance — the fixed yearly draw is what lets a bad early stretch, taken from a still-large balance, do damage it can never claw back.
| Withdrawal rate / yr | Worst-first lasts |
|---|---|
| 3% | 30+ yrs€30k / yr |
| 4% | 26 yrs€40k / yr |
| 5%now | 17 yrs€50k / yr |
| 6% | 14 yrs€60k / yr |
| 7% | 12 yrs€70k / yr |
| 8% | 10 yrs€80k / yr |
Same pot, same market — only the size of the yearly draw changes. Watch for the rung where even the cruelest order lasts the distance: that sequence-safe rate sits well below the 6% average return — the haircut you take for not knowing which order the market will deal. It's why the classic rule of thumb hovers near 4% rather than up at the average. Click a rate to load it.