Take two clients. Both retire with the same corpus, the same withdrawal amount, and — over a 25-year horizon — the exact same average annual return. On a standard retirement calculator, they look identical. In reality, one of them can run out of money a decade before the other.
The difference is the order the returns arrive in, not the average itself. This is sequence-of-returns risk, and it's most dangerous in the years right around retirement, when the corpus is largest and withdrawals have started.
Why order matters when you're withdrawing
While a client is accumulating — no withdrawals, only contributions — the order of good and bad years barely matters; compounding evens it out over a long enough horizon. The moment withdrawals begin, that stops being true.
A sharp downturn in the first two or three years of retirement forces the client to sell more units at depressed prices just to fund the same withdrawal amount. That permanently shrinks the base left to recover when markets turn back up. The same downturn arriving in year 20 instead of year 1, on a smaller remaining corpus with less time left to matter, does far less damage — even though the long-run average return is unchanged.
This is precisely the risk a standard SWP projection misses, because it typically assumes one flat, average rate of return for the entire withdrawal period. Two clients modeled with the same flat 10% average will show the identical projected corpus — right up until real, out-of-order market returns show one of them running dry years ahead of the other.
What this changes about the conversation
It reframes "will my money last" from a single average-return question into a question about volatility timing and withdrawal flexibility — a cash buffer for the first few retirement years, a willingness to trim withdrawals after a bad sequence, or a lower initial withdrawal rate than a flat-average model would suggest. None of that is visible from a standard SWP calculator alone.
SyncWealth's Sequence Risk tool makes this concrete.
It runs the same average return in different orders against a withdrawal plan and shows how differently each one plays out — a companion to a standard SWP calculator, for the conversation a flat-average projection can't have.
Open the tool →