Sequence of Returns
See why the order of your returns matters little while you’re saving, and a great deal once you start drawing income.
Same returns, same average
In this example, the same ten market years average 5.4% a year in either order. While you’re saving, $100,000 ends at $168,825 either way.
Order matters once you withdraw
Taking $30,000 a year, rising 3% a year, from $654,406 at 67: if the losses come first, your savings are $202,685 lower at 77 than if they come last.
Your money could run out sooner
With the same returns for both after 77, losses first runs out at age 93. Losses last still has $387,812 at 95.
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Hypothetical illustration for educational purposes only. Not a projection or guarantee. Uses the ten hypothetical annual index returns from our Protected Indexed Account example, shown as index price return excluding dividends, which would increase results. After age 77 both cases use the same returns. Withdrawals are taken at the start of each year and rise 3% a year. No fees, taxes or Social Security income are shown. Actual returns vary and can be negative. Browning Insurance Agency LLC, Colorado agency license #615914.
