Retirement income education

What If the Bad Years Come First?

Two people can receive the same market returns and take the same retirement withdrawals—yet end up in very different places.

Enter a few numbers to see why the timing of gains and losses matters once retirement income begins.

Same returns. Same average. Different order.

No email required. Educational illustration only—not a forecast of your portfolio.

Your assumptions

Build your illustration

How much would you have invested when withdrawals begin?

Enter an amount from $10,000 to $100,000,000.

How much would you withdraw from this portfolio in the first year?

Do not include Social Security, pensions, wages, or other income that does not come from this portfolio.

$40,000 per year · $3,333 per month · 4.0% of starting portfolio

How much should that withdrawal increase each year?

Or enter a custom annual increase

At this setting, the annual withdrawal in year 10 would be $52,191.

Illustration period: 26 years, using calendar-year S&P 500 total returns from 2000 through 2025.

Why this period?

This period includes multiple major market declines and recoveries. We use every calendar-year return in the period, then reverse the exact same returns to isolate how timing can affect a portfolio taking withdrawals. It is one educational example—not a prediction or probability analysis.

Your result

Here Is the Difference Timing Created

Both paths use the same 26 calendar-year returns and the same withdrawal assumptions. The only difference is the order in which gains and losses arrive.

Calculating your illustration…

What Stayed the Same?

Same 26 returns Same average return Same withdrawal plan Different order only

Portfolio path

See How the Two Paths Unfold

Difficult Years Early Difficult Years Later

The chart shows each year-end balance after that year’s return and withdrawal. The reversed path is hypothetical, not a forecast.

Optional experiment

Try One More Comparison

Turn withdrawals off to see why the order of a completed return sequence does not change the final compounded value when no money is being removed.

Turn withdrawals offThis changes the illustration, not the amount you entered above.

The lesson

Why Does the Order Matter?

After an early decline, withdrawals come from a smaller account. That leaves fewer dollars invested when the recovery arrives. The same decline can be less damaging later, after the portfolio has had more time to grow.

The goal is not to avoid the market. It is to avoid making every retirement paycheck depend on selling investments at whatever price the market offers.

See the Year-by-Year Math

Returns are applied first, followed by the withdrawal at the end of each illustrated year.

Methodology and disclosures

How This Illustration Works

This is not a projection of your portfolio. The illustration uses the S&P 500 to demonstrate one retirement risk. Your investments, fees, taxes, withdrawal timing, and results may be different.

Returns and withdrawal timing

This educational illustration uses S&P 500 total returns from 2000 through 2025, including reinvested dividends. The same 26 returns are shown in historical order and in reverse order. Returns are applied to the beginning balance, followed by the withdrawal at the end of each year.

For simplicity, this illustration treats income as one year-end withdrawal. Actual retirement income is often taken monthly and may produce different results.

What the illustration does not include

Taxes, advisory fees, investment expenses, other income sources, and rebalancing are not modeled. The illustration is not the result of an actual investable product, and an investor cannot invest directly in an index.

How to Use This Result

Use this illustration to ask a practical retirement-income question: if difficult markets arrive early, where would your monthly paycheck come from?

A thoughtful plan shows what could fund near-term withdrawals, what could remain invested rather than being sold during a decline, and what adjustments may be available if conditions change.

This illustration does not predict what your portfolio will do or tell you which strategy is right for you. The reversed path is hypothetical and historical results are not forecasts. Use it to identify questions worth addressing in your own plan—not as individualized investment, tax, insurance, or legal advice.

Calculation version 1.0.0 · Generated

Rick and Sean Sparkman of Pathfinders Wealth

A planning conversation

This calculator shows one risk. Your real retirement has more moving parts.

Social Security, pensions, taxes, cash reserves, investments, spending, and both spouses’ needs can all change the picture. In a 25–30 minute conversation, Rick or Sean will help you organize the questions. By the end, we’ll tell you what needs attention, if anything, and what makes sense to look at next. No preparation is required.

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Investment assets held with independent custodians
Costs, risks, and tradeoffs explained before you decide

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Your next step

What Could This Mean for Your Retirement Paycheck?

This tool looks at one part of the retirement picture. It cannot see your household’s entire financial situation.

Bring us what you are doing today and the question that keeps coming up, and we’ll help you see whether anything needs to change.

Start a Conversation

See how retirement income planning brings the pieces together

Learn more at https://www.pathfinderswealth.com/