This retirement calculator helps investors explore sequence of return risk, safe withdrawal strategies, market cycles and valuation effects when planning for financial independence and early retirement.
Free calculator to simulate sequence of return risk, market cycles and retirement withdrawals.
Explore how market cycles, valuation levels and withdrawal timing affect long-term portfolio outcomes for FIRE and retirement planning.
Most retirement calculators assume smooth yearly returns. Real markets do not behave that way. This simulator models long market cycles, bear market declines, valuation effects, and portfolio withdrawals to illustrate how sequence of return risk can dramatically change retirement outcomes.
Instead of assuming constant growth, the model allows markets to move through extended growth phases and downturns. It also incorporates valuation normalization, reflecting how markets historically move back toward long-term average valuation levels.
Sequence of return risk refers to the danger of experiencing poor returns early in retirement. When withdrawals occur during market downturns, portfolio damage can become permanent, even if long-term average returns appear strong.
This simulator allows you to explore how the timing of downturns, withdrawal rates, and contribution periods affect long-term sustainability.
Historically, long-term stock market returns have often been influenced by starting valuation levels. Periods of elevated valuation have tended to precede lower long-term returns, while depressed valuation levels have historically preceded stronger returns.
This model incorporates valuation normalization over a chosen time horizon, illustrating how overvaluation or undervaluation may influence long-term portfolio outcomes.
In this model, market valuation refers to any metric that compares market price to an underlying measure of fundamental value. Examples include price-to-earnings ratios (P/E), cyclically adjusted earnings ratios (CAPE), the Buffett Indicator (market capitalization relative to GDP), or similar valuation measures. It's up to you.
The simulator does not assume a specific valuation metric. Any measure that expresses price relative to an underlying economic value can be used to represent market valuation levels.
The model is designed to illustrate valuation effects at the level of the overall stock market. It is not intended for analyzing individual stocks or company-specific valuation changes.
Sequence of return risk can arise from two different mechanisms. One is cyclical: a bear market occurs early in retirement but the market eventually recovers as the cycle turns.
The second form is valuation-driven. When retirement begins at a time of unusually high market valuation, future returns may remain lower for an extended period as valuations move back toward historical averages. In that case, portfolio damage may not be recovered even if market cycles eventually improve.
This simulator is designed for long-term investors who want to explore how market cycles, valuation levels and withdrawal strategies interact over decades. It may be particularly useful for individuals pursuing financial independence and early retirement (FIRE), as well as traditional retirement planning.
The model allows users to experiment with contribution periods, market cycle assumptions and withdrawal timing to better understand the risks that arise when markets behave differently from long-term averages.
To explore sequence of return risk, start by entering your current age, expected retirement age and the size of your investment portfolio. You can then adjust contribution years, withdrawal amounts and market assumptions to see how different scenarios affect long-term portfolio sustainability.
The simulator allows you to test different market cycle assumptions, bear market declines and valuation levels. This helps illustrate how the timing of market downturns relative to retirement withdrawals can dramatically change long-term outcomes.
By experimenting with different withdrawal growth rates and retirement ages, you can better understand how sequence of return risk affects safe withdrawal strategies and early retirement planning.
Sequence of return risk describes the danger of experiencing poor investment returns early in retirement when withdrawals begin. Early market losses combined with withdrawals can permanently reduce portfolio sustainability.
This calculator models long market cycles, valuation changes and portfolio withdrawals. It allows users to explore how these factors interact over long investment horizons.
Yes. The simulator can be used for financial independence and early retirement (FIRE) planning by adjusting contribution years, withdrawal timing and withdrawal growth assumptions.
This simulator is an educational tool designed to illustrate how market cycles, valuation changes, and withdrawal timing may influence long-term portfolio outcomes. It is not financial advice and should not be used as the sole basis for investment or retirement decisions.
Financial markets are unpredictable and real-world outcomes can differ substantially from model projections. Always consider consulting a qualified financial professional before making investment decisions.
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Last updated: March 2026