Will Your Pension Pot Last? Run Every Historical Scenario.
Most retirement calculators give you one number based on an assumed average return. But markets don't deliver averages — they deliver sequences. This simulator runs your drawdown plan against every retirement window in real S&P 500 data since March 1957, so you can see the full range of what history actually shows.
You've spent 20 or 30 years building your pension pot. You've done everything right — invested regularly, stayed the course through crashes, and now you're approaching the finish line. The question is: will your pot last as long as you need it to?
This is the decumulation phase — the transition from growing your wealth to spending it. And it comes with a risk that most personal finance content barely mentions: sequence-of-returns risk.
⚡ Key Concept
Two people can invest in the exact same fund, earn the exact same average annual return over their lifetimes, and end up in completely different financial positions — purely because of when the good and bad years happened. In retirement, the order of returns matters far more than the average.
What Is Sequence-of-Returns Risk?
Imagine two investors both retire with £500,000 and withdraw £25,000 per year. Both experience an average return of 6% over 25 years. But Investor A gets the bad years first; Investor B gets the good years first. Investor A's portfolio can be devastated while Investor B's grows substantially — even though their long-run average return is identical.
Why? When you withdraw money during a market downturn, you're forced to sell shares at low prices. Those sold shares can't participate in the recovery. As markets rebound, your portfolio has fewer assets to appreciate — and each subsequent withdrawal takes an ever-larger percentage of what's left.
The 4% Rule — What It Actually Says
The 4% rule emerged from the Trinity Study (1998), which analysed US stock and bond portfolios from 1926 onwards. The finding: a 4% initial withdrawal rate, adjusted annually for inflation, had historically survived 30-year retirement periods in most scenarios.
It's a useful starting point. But it comes with caveats:
It was based on US data. UK and global portfolios may behave somewhat differently.
It assumed a balanced portfolio — roughly 50–75% equities.
The study's definition of "success" simply meant the portfolio didn't hit zero.
Longer retirements — 35 or 40 years — substantially increase depletion risk.
Fees, taxes, and behavioural decisions are not factored in.
⚠ Worth Knowing
Many financial commentators cite 4% as a "safe" withdrawal rate without mentioning that it was derived from a relatively optimistic period of market history. Retirement starting dates in the late 1960s — entering the era of stagflation — produced much lower success rates with the same strategy.
How to Read the Simulator Results
The chart shows every historical drawdown window as a faint grey line. Overlaid on top are seven meaningful reference lines:
Absolute best (bright green, solid) — the single best retirement start date in the entire dataset.
Absolute worst (bright red, solid) — the single worst retirement start date.
Typical outcome (white) — the median result. Half of all historical retirees did better, half did worse.
Good era (orange, dashed) — better than 75% of all historical starts.
Tough era (purple, dashed) — worse than 75% of all historical starts.
Best 10% (teal, dashed) — the 90th percentile.
Worst 10% (amber, dashed) — the 10th percentile.
Interactive Simulator
Retirement Drawdown Simulator
Set your pot size, monthly withdrawal, and retirement length — then run real market history against your plan.
25 yrs
Nominal returns
Log scale
Best Outcome
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Worst Outcome
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Typical Outcome
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Survival Rate
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Ruin Rate
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Median Depletion Year
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Portfolio Value Over Time — All Historical Windows
All periods
Abs. best
Abs. worst
Typical
Good era
Tough era
Best 10%
Worst 10%
Calculating all historical windows…
Set your parameters above and click Run Simulation
How to read this chart: Each faint grey line is a real historical retirement window from the S&P 500 since 1957 — so you're seeing every documented outcome, not a projection. The solid green and red lines show the single best and worst starting dates ever recorded. The dashed lines show the typical middle ground and the outer 10% bands. If the red line crosses zero, that's a real historical scenario where the portfolio ran dry.
📉 Absolute Worst Period — Sequence Risk in Action
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📈 Absolute Best Period — What a Lucky Retirement Looks Like
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What This Means For Your Plan
Historical Outcome Scenarios
Each row represents a different band of historical retirement start dates — from the unluckiest to the luckiest. "Survived" means the portfolio lasted the full retirement without running out.
Scenario
Started
End Value
Ann. Return
Result
Understanding Your Results
How to Use These Results Practically
The worst historical scenario in this S&P 500 dataset is typically a retirement beginning in the late 1960s — entering the era of stagflation where both equity returns and real purchasing power were severely eroded for over a decade. Meanwhile, the best historical outcomes tend to cluster around retirements that began just after major market crashes.
Neither extreme is a prediction. But the range they define is the most honest answer history can give you about what's possible.
Three Things You Can Do If the Numbers Look Worrying
Use flexible withdrawals. Reducing withdrawals by 10–20% during a prolonged downturn can dramatically improve survival rates.
Keep a cash buffer. Holding 1–2 years of living expenses in cash means you never have to sell equities during a downturn.
Protect the critical first five years. The first five years of retirement are the most dangerous from a sequence-of-returns perspective.
A Note on This Data
This simulator uses the S&P 500 total return index (dividends reinvested) from March 1957. Most UK pension and ISA portfolios invest in global equity funds rather than the S&P 500 alone, so your actual results may differ. However, the structural lessons about sequence risk apply universally.
The simulation does not account for platform fees, fund ongoing charges, tax on withdrawals, or state pension income. Incorporating realistic costs would reduce the results shown by roughly 0.3–0.7% per year.
💡 Practical Tip
Run the simulation at two or three different withdrawal levels — your ideal monthly income, your comfortable minimum, and your absolute floor. Understanding which withdrawal rate gives you a survival rate above 90% is one of the most useful inputs to a retirement plan.
Frequently Asked Questions
What is sequence-of-returns risk?
Sequence-of-returns risk is the danger that poor market returns early in your retirement can permanently damage your portfolio. Because you're withdrawing money during a downturn, you're forced to sell more shares at depressed prices. When markets recover, you have fewer shares to benefit from the rebound.
What is the 4% rule and does it work in the UK?
The 4% rule originated from US academic research suggesting that a 4% initial withdrawal rate, adjusted each year for inflation, has historically survived 30-year retirements most of the time. UK research tends to suggest 3–3.5% as a safer rate for UK-based investors.
How much do I need in my pension pot to retire?
A common approach is to multiply your desired annual income from investments by 25 (implying a 4% withdrawal rate). So if you need £24,000 a year from investments, that suggests a pot of roughly £600,000. But this is a starting estimate — the right number depends on your state pension entitlement, other income, and how long you expect to live.
What does "ruin" or "portfolio depletion" mean in this simulator?
In this simulator, "ruin" means the portfolio balance reached zero before the end of the specified retirement period. The ruin rate shown is the percentage of all historical S&P 500 retirement start dates that resulted in the portfolio running dry within your chosen time horizon.
Should I use nominal or real (inflation-adjusted) returns?
Real (inflation-adjusted) returns give a more honest picture of your actual purchasing power over time. For retirement planning, the inflation-adjusted view is generally more useful — it tells you what your pot is actually worth in today's money.
Why does this simulator only use data from 1957?
The S&P 500 index in its current 500-stock form was officially constituted in March 1957. Using data from this point ensures the simulation reflects the behaviour of the actual modern index rather than a reconstructed or approximated earlier version.
Disclaimer: This tool is for educational and informational purposes only. It does not constitute financial advice. Past performance is not a guarantee of future results. Data is the S&P 500 Total Return index from March 1957 and may not reflect UK or global market performance. Always consult a qualified financial adviser before making significant investment or retirement decisions. CalculatorDashboard.com is not regulated by the FCA.