Why Your Retirement Depends on the Order of Returns, Not Just the Average

We’ve just launched our Portfolio Stress-Test & Sequence-of-Returns (SoR) Calculator: greatinvestmentsstresstest.mgx.world.

If you’re serious about protecting your wealth, it’s a tool you can’t afford to ignore.

Most investors obsess about the average return. “My portfolio should make 7% a year.” Fine. But here’s the kicker: you can have the same average return and still end up broke depending on when those returns arrive.  That’s called sequence-of-returns risk. And it’s the silent killer of retirement plans. The Lucky Joe vs Sad Sally Problem

Imagine Joe and Sally both retire with £1 million. They both get an average of 7% a year over the next 20 years.

• Joe is “lucky”: markets rise in the early years, giving his portfolio a cushion before the inevitable downturns.

• Sally is “unlucky”: markets tank in the first few years. She’s drawing £50,000 a year at the same time her investments are shrinking.

By year 20, Joe still has a healthy balance. Sally is skint. Same average return, wildly different outcomes.

This is why focusing only on averages is financial malpractice.

What Our Calculator Does

Our new SoR Stress-Test tool lets you:

• See the impact of bad timing. It runs simulations showing how your portfolio fares if markets tank early versus later.

• Run Monte Carlo simulations. That’s a fancy way of saying we throw thousands of possible futures at your money and see how many survive.

• Compare strategies. Fixed withdrawals, percentage-based withdrawals, or dynamic “guardrails.” You’ll see which keeps the lights on longest.

• Visualise risk. The tool gives you charts that make it painfully clear when you could run out of money - and when you’re safe.

It’s a wake-up call in graph form.

Why This Matters for You

If you’re 30, you might shrug and think this doesn’t apply yet. But the decisions you make now - how much you save, how you allocate, how much risk you can stomach - will determine whether you’re Joe or Sally.

If you’re 60 and about to retire, this is your financial crash test. Better to see the dummies smashed on the screen than your actual portfolio smashed in real life.

The Hard Truth

• A 7% average return doesn’t mean you’ll actually get 7% a year -or our models which generate 30% for that matter

• Bad luck early on can ruin an otherwise good plan.

• The only defence is planning for bad sequences, not just good ones.

Our SoR Calculator doesn’t sugar-coat the numbers. It tells you if your retirement strategy is robust or if you’re playing Russian roulette with your money. Try It Yourself

Test your portfolio now: greatinvestmentsstresstest.mgx.world

Think of it as your financial seatbelt. You hope you won’t need it — but you’ll be glad it’s there when the markets crash. Disclaimer: The information provided in this article and through the Portfolio Stress-Test & Sequence-of-Returns (SoR) Calculator is for educational and illustrative purposes only. It does not constitute financial advice, investment advice, or a personal recommendation. Past performance is not a reliable indicator of future results. The outputs from the calculator are based on simulated scenarios and assumptions, which may not reflect actual market conditions or your personal circumstances. Alpesh Patel OBE www.campaignforamillion.com