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RETIREMENT WITHDRAWAL STRESS TEST
Stress-test the 4% rule against inflation, long retirements and weak early returns
See how the same starting withdrawal can produce very different outcomes when returns arrive in a different order.
No loginLocal calculationsDeterministic scenarios
RESULTS
How the plan behaves under three deterministic paths
PORTFOLIO PATH
Balance through the selected retirement horizon
Withdrawals occur at the start of each year, then the selected scenario return is applied.
BaseCautiousAdverse early sequence
WHY ORDER MATTERS
The same returns can produce different outcomes
These paths use the same ten annual return values in a different order. The difference comes from withdrawals interacting with the timing of gains and losses.
Weak-firstStrong-first
RATE SENSITIVITY
Compare 3%, 3.5%, 4% and 5% under the same adverse assumptions
This is a sensitivity table, not a recommendation that one percentage is universally safe.
| Starting rate | First-year withdrawal | Modelled status | Ending balance in today's money |
|---|
ANNUAL VALUES
Follow the calculation year by year
Use the detailed table when you want to verify opening balance, withdrawal, return and closing balance.
Show annual valuesBase · 30 years
| Year | Age | Opening balance | Withdrawal | Inflation | Return | Growth / loss | Closing balance | Status |
|---|
METHOD
Transparent annual mechanics
- Record the opening portfolio.
- Take the inflation-adjusted withdrawal at the start of the year.
- Apply that year's deterministic return to the remaining balance.
- Increase the next withdrawal using that scenario's inflation assumption.
Closing balancemax(0, (Opening balance − Withdrawal) × (1 + Return))
Important limitations
- No Monte Carlo probability or historical backtest.
- No taxes, investment fees, pension income or spending guardrails.
- The adverse return pattern is synthetic, disclosed and normalized to the selected ten-year geometric return.
- Results are educational illustrations, not individualized financial advice.
FAQ
Important questions about the stress test
Does this tool prove that 4% is safe?
No. It is a deterministic educational stress test. It does not estimate a probability of success or guarantee that any withdrawal rate will work.
Why can the order of returns change the result?
Withdrawals remove money while the portfolio is changing. Losses early in retirement can leave less capital available for later recovery, even when the same annual returns occur in a different order.
Why is the adverse return sequence synthetic?
The purpose is to isolate a disclosed stress pattern without pretending it is historical data. The first ten annual returns are normalized so their geometric average matches your selected long-run return.
Does Carrowmont store the values I enter?
No. The calculation runs locally in your browser. No account or cloud storage is required.
SOURCES & PREPARATION
Educational context, transparent model
Carrowmont owns and maintains this deterministic model. External research supports the educational concepts of withdrawal rates, inflation and sequence risk; it does not guarantee the model's future accuracy.