Reality Check
MARKET RETURNSSEQUENCE RISKRETIREMENT INCOME
Purpose: Demonstrate how the timing and order of returns affect accumulation, retirement distributions and long-term account survival. This V1 uses the same historical S&P dataset already used in the TriQuest Qualified Plan Analyzer.
Client & Case Management
No case saved yet.
1
Client & Funding
Enter the client timeline, starting capital and accumulation funding assumptions.
Client & Timeline
Starting Balance & Annual Funding
Retirement Distributions
Depletion Distribution Solver
Calculate the spendable retirement income supported through the selected Withdrawal End Age using the currently selected return sequence and Solver Target Ending Balance. Level Distribution keeps the same dollar withdrawal every year. Inflated Distribution starts with a lower first-year withdrawal and increases that amount annually by the Inflated Distribution COLA. The selected sequence becomes the Solve Sequence, and that exact year-by-year dollar schedule is then locked for stress testing.
Solved Level Annual Distribution—
Inflated Year 1 Distribution—
Inflated Final-Year Distribution—
2
Investment Assumptions
Set investment drag, taxes and optional protection assumptions.
Optional Taxes & Turnover
Tax treatment: In Historical mode, Total Return is separated into the S&P price-return component and modeled dividend component. By default, 90% of modeled dividends are taxed at the 15% Qualified Dividend Tax Rate and the remaining 10% at the 24% Ordinary Income Tax Rate. Turnover determines how much annual price gain/loss is realized; modeled capital losses carry forward to offset future realized gains before Capital Gain Tax is applied. During retirement distributions, Reality Check treats the solved schedule as spendable income. For the taxable Main Market path, it estimates the embedded-gain percentage from modeled tax basis and grosses up the account withdrawal so the client receives the same spendable income after withdrawal capital-gain tax. Indexed and Fixed alternatives are modeled without withdrawal tax unless a strategy-specific tax treatment is added. In Fixed return mode for the Main Market path, modeled taxable earnings are taxed at the Ordinary Income Tax Rate.
Optional Term Insurance — Main Market Only
Term insurance treatment: The annual premium is deducted from the investment account for the number of coverage years entered, beginning in the first modeled year. The death benefit remains a protection assumption and is not added to account value during the client lifetime.
3
See the Result
Presentation view first; supporting detail remains available below.
2
Optional Strategy Comparison
Turn on Indexed or Fixed only when you want an additional comparison path.
Market Account
Historical S&P 500 total return minus management fee.
Indexed Strategy
Cap Method
AgeCap
Custom Cap Schedule replaces the Single Cap. If an age does not have its own row, the most recent prior cap continues until a new cap is entered.
Uses the selected historical S&P 500 price-return window independently from the Main Market Return Method, then applies participation, cap and floor. Indexed Funding Load Fee and Indexed Annual Strategy Fee are separate alternative-strategy assumptions. Changing Main Market to Fixed does not change the Indexed S&P history. This is a generic training strategy, not a carrier illustration.
Fixed Strategy
Independent fixed-strategy assumptions. Taxable mode taxes annual fixed interest at the Ordinary Income Tax Rate. Tax-Free mode applies no annual income tax. Fixed Funding Load Fee and Fixed Annual Fee apply only to this alternative.
Market Account — Selected Sequence
—
Total Contributions—
Total Distributions—
Years of Funds—
Last Fully Funded Age—
Indexed Strategy
OFF
Total Contributions—
Total Distributions—
Years of Funds—
Last Fully Funded Age—
Fixed Strategy
OFF
Total Contributions—
Total Distributions—
Years of Funds—
Last Fully Funded Age—
Sequence Stress Test — Same Spendable Income, Different Order
Solve Sequence — Not Solved
Distribution MethodNot Solved
Year 1 Distribution—
Final-Year Distribution—
Total Scheduled Spendable Income—
Total Spendable Income Paid—
Full Income Funded Through Age—
Ending Balance—
Stress-Test Sequence
Uses Same Spendable ScheduleYES
Total Scheduled Spendable Income—
Total Spendable Income Paid—
Unfunded Spendable Income—
Full Income Funded Through Age—
Ending Balance—
Choose a Solve Sequence, calculate its depletion distribution, then select a different sequence to measure the retirement-income shortfall using the exact same withdrawals.—
Important: the stress-test sequence does not calculate a new lifestyle-income target. It receives the exact same year-by-year spendable-income schedule locked from the Solve Sequence. Each strategy must fund whatever gross withdrawal is required to deliver that spendable amount.
Actual Market SequenceSelected Market SequenceIndexed StrategyFixed Strategy
Calculation Detail — Sequence Laboratory
The Sequence Effect
Solve Sequence — Total Spendable Income
—
Funds Last Through Age —
Test Sequence — Total Spendable Income
—
Select another return sequence
Teaching Result
—
Lock a Solve Sequence, then test another order
Same returns • same average return • different order — the sequence can change both retirement income and remaining wealth.
Return Method
Return Source
S&P Starting Year
S&P Ending Year
Historical Window Presets
Presets change only the historical start and ending years. All other client, tax, fee, funding, and strategy assumptions remain unchanged.
Return Sequence
Average Return —
Actual Return —
Net Return —
Strategic Return —
Years in Sequence —
Sequence Mode Actual
S&P Window —
Same returns — different order.
Client Strategy Result
Total Capital Contributed —
Total Spendable Income —
Ending Value —
Total Economic Drag —
Total Loads$0
Management Fees$0
Dividend Taxes$0
Capital Gain Tax$0
Withdrawal Tax$0
Term Premiums$0
Total Economic Drag$0
| Age | Sequence Year | Return | Beginning | Funding | Load | Term Premium | Growth / Loss | Mgmt Fee | Dividend Tax | Capital Gain Tax | Target Spendable Income | Gross Withdrawal | Withdrawal Tax | Spendable Income Paid | Unfunded Spendable Income | Ending |
|---|
Validation Ledgers
Each validation ledger opens and closes independently. Open only the audit you need.
Strategic Return Validation Detail
Purpose: validates Strategic Return from both sides of the calculation. The ledger shows how each year's return, fees and taxes create the ending account value, then shows the client's actual cash flow used in the IRR. The final row reconciles to the headline Strategic Return.
| Age | Sequence Year |
Return | Beginning Value |
Client Funding |
Growth / Loss |
Mgmt Fee |
Dividend Tax |
Capital Gain Tax |
Term Premium |
Distribution Received |
Net Client Cash Flow |
Ending Value |
Strategic Return |
|---|
Indexed Strategy Validation Ledger — Actual Benchmark
Validates the Indexed benchmark against the Actual market-year order using the same client funding and withdrawal schedule. This is a generic indexed training strategy, not a carrier illustration.
Total Contributions—
Total Loads—
Total Strategy Fees—
Total Distributions—
Unfunded Income—
Ending Value—
| Age | Sequence Year | S&P Price Return | Cap Used | Indexed Credit Rate |
Beginning | Funding | Indexed Funding Load Fee | Growth / Loss | Indexed Annual Fee | Scheduled Distribution |
Actual Distribution Paid | Unfunded Distribution | Ending |
|---|
Fixed Strategy Validation Ledger — Actual Benchmark
Validates the Fixed alternative using its own rate, funding load, annual fee, and tax treatment while applying the same client funding and spendable-income schedule.
Total Contributions—
Total Loads—
Fixed Rate—
Total Annual Fees—
Total Income Tax—
Total Distributions—
Unfunded Income—
Ending Value—
| Age | Reference Year | Fixed Rate | Beginning | Funding | Fixed Funding Load Fee | Growth | Fixed Annual Fee | Income Tax |
Scheduled Distribution | Actual Distribution Paid |
Unfunded Distribution | Ending |
|---|