Equity SWP Stress Test — Sequence-of-Returns Risk

Client & Scenario

Client name

Prepared by

Date

Portfolio & SWP

Initial corpus

Planned return (sets withdrawal)

Monthly SWP is fixed at corpus × this rate, preserve-capital style — then held constant while actual returns vary.

Stress period

Fixed monthly withdrawal

Stress scenarios

Personal choice

Steady (= planned) Crash early Crash late Lost decade Bull run V-shaped Volatile sideways

Same avg · bad start Same avg · good start

“Same avg” pair = identical returns re-ordered → same average & CAGR, opposite survival.

Yearly returns (%)

✓

Ending corpus

Lowest point

Total withdrawn

Max drawdown

Planned return

used to size the SWP

Realized average

arithmetic mean of years

Realized CAGR

geometric (compounded)

🎯

Portfolio value month-by-month under the actual return sequence

Actual corpus path Starting corpus

The fluctuating sequence under test

GainLossAverage

Rising % = danger; the fixed SWP eats a bigger share after losses

Withdrawal rate that year

Opening value → growth → fixed withdrawal → closing value

Assumptions & Disclaimer