Sequence of Returns Illustration — Marshall Wealth Management
The Marshall Plan · Educational Illustration
Same returns. Different order. Oppositeendings.
This is a teaching illustration, not a forecast. It shows a single mathematical point: two hypothetical retirees with the same average return and the same withdrawals can end up in very different places purely because of the order in which the good and bad years arrive. It does not predict what will happen to your own savings.
The Illustration — 25 Years
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Strong Years FirstWeak Years First
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Show the year-by-year math
Age
Strong-first return
Balance
Weak-first return
Balance
How this illustration works — criteria, assumptions and limitations
What it does. It applies one fixed set of 25 annual returns to a hypothetical starting balance twice — once in the order shown, once in the exact reverse order — while subtracting the same withdrawals from both. Nothing else differs between the two lines.
The two orders are deliberate opposites. They are chosen to show the widest gap the same 25 returns can produce. A real investor's experience would almost certainly fall somewhere between the two lines, not on either one.
Returns are illustrative, not a forecast. They are not the historical record of any index, fund, account or strategy, and are not tied to any investment Marshall Wealth Management offers.
The rate you set is a simple average. Compounding means the actual annualized growth rate is lower. Both figures are shown under the chart.
What it leaves out. This is a simplified model. Real outcomes are affected by many things it does not attempt to capture:
No taxes. Withdrawals from tax-deferred accounts are generally taxable as ordinary income. Balances and withdrawals here are shown before tax.
No product fees, advisory fees, or trading costs beyond whatever you assume in the return you set.
Dollars are not inflation-adjusted. A balance 25 years out buys considerably less than the same number does today.
No Social Security, pension, annuity, part-time income, long-term-care costs, market shocks, changes in spending, or changes in health.
No securities are analyzed or selected. The illustration does not search, evaluate, favor or recommend any security, fund, insurance product or strategy.
Results will vary with each use and over time — every change you make to the inputs produces a different result, and the same inputs entered on a different day will produce the same arithmetic but not the same real-world outcome.
IMPORTANT: The projections or other information generated by the Marshall Wealth Management Sequence of Returns Illustration regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.
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