How to Use the FIRE Sequence of Returns Risk Calculator

A FIRE Movement Sequence of Returns Risk Calculator estimates how random annual market returns might affect your early retirement portfolio over time, helping you understand how risky early retirement can be when returns vary year by year.

What is the Sequence of Returns Risk?

In early retirement, when you experience good or bad market years matters as much as how many you get. This is called sequence of returns risk. A few poor early years can drastically reduce your portfolio, even if long-term averages look fine.

How to Use This Calculator

1. Enter your initial portfolio value – the amount you've saved for retirement.
2. Enter your planned annual withdrawal – how much you plan to spend each year.
3. Enter the number of retirement years you want to simulate – typically 30–40 for FIRE retirees.
4. Click "Simulate Random Returns" to see how a randomly generated sequence of returns affects your portfolio.

Behind the Scenes

• It randomly generates yearly returns between -10% and +10%.
• It withdraws your annual spending at the end of each year.
• It stops early if your portfolio hits zero.

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FIRE Calculator FAQ

Q1: What does this calculator simulate?
A: It simulates a random series of returns over your retirement period and applies your annual withdrawal each year to show how your portfolio performs.

Q2: Why do returns vary randomly?
A: Real markets don’t return the same amount every year. This randomness models real-life market ups and downs.

Q3: Can I run multiple simulations?
A: Yes, click the button again to re-simulate a different sequence of returns.

Q4: Why is this important for FIRE retirees?
A: Early retirees depend on their portfolio for longer. If the market drops early in retirement, it can permanently damage the sustainability of your plan.

Q5: Can I modify return ranges?
A: Not in this version, but the script could be easily adjusted to simulate different volatility or average return assumptions.