When returns arrive in the wrong order

The 4% rule sounds like a promise: save enough, withdraw 4% a year, and the money outlasts you. The rule leans on one quiet assumption, that the market years show up in a workable order.

Two retirees, one average

Deal the same three years of returns in opposite orders: up 20%, up 10%, down 15% for one saver; down 15% first for the other. With $40,000 drawn each year, the friendly order ends near $1,010,000 and the rough order near $981,000. The average return never differed. The ending balances do.

Why the early years weigh most

A withdrawal in a down year sells more shares to raise the same cash. Every later gain then lands on a smaller base, and the shortfall keeps compounding for decades. A rough stretch at 60 does more damage than the same stretch at 75, because the losses have more years to compound against a shrinking balance.

Where the survival math lives

Firenomics covers exactly this ground: where the 4% rule breaks, withdrawal strategies tested against sequence risk, and what spending fear costs in expected value. The set lives at Firenomics, FIRE math built for bad decades, including the 4% rule failure-point breakdown.

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