◆ METHODOLOGY & PLAIN-ENGLISH GUIDE (CLICK DOTTED TERMS FOR DEFINITIONS)
Understanding Deterministic Projections vs. Sequence-of-Returns Risk
This planner compounds working savings monthly and tests annual inflation-adjusted retirement withdrawals assuming a steady average return (reducing portfolio return by 2 percentage points during retirement to reflect a more conservative bond/cash allocation). In real markets, severe bear markets during the first five years of retirement ('sequence-of-returns risk') can deplete a portfolio faster than a smooth average return suggests—which is why keeping 1 to 3 years of spending in T-Bills or cash reserves helps protect equity shares.