Blog reader with the “Unkown” moniker brought up an important point about the weaknesses of using computer models to simulate the withdrawal of funds from a retirement portfolio. I cannot say that I fully understand the maths, but I think I can explain the problem  to a lay person.

Most of the retirement simulations makes sense, but if you are unfortunately enough to face a nasty market crash just around a year or two after giving the middle finger to your corporate bosses, the odds of running out of money increases dramatically.

Initially I thought that there was no simple solution to this “Sequence of Return” problem – The foremost expert recommends a wonky approach called an equity glide path to resolve this issue. But a quick discussion with Kyith of Investment Moats gave me a useful insight to this issue that can be executed by laypeople.

Kyith summarised the …