Short answer
A 60/40 label does not determine a retirement outcome by itself. The actual return path, withdrawal schedule, inflation, fees, taxes, and rebalancing policy all affect how long a portfolio can support spending.
Illustrative scenario
Use this page to test the timing risk of a balanced portfolio example. It does not assume that every investor's 60/40 portfolio has the same holdings or return profile. The example below uses a starting balance of $1,000,000, a first-year withdrawal of $40,000, 2.0% annual inflation, and 30 annual returns. The figures are illustrative and use no fees or taxes.
| Scenario | Ending balance | Status | Total withdrawn |
|---|---|---|---|
| Bad returns early | $0 | Depletes in year 15 | $685,242 |
| Entered order | $0 | Depletes in year 30 | $1,613,735 |
| Good returns early | $1,049,769 | Survives all 30 modeled years | $1,622,723 |
The bad-first and good-first rows use the same return set. Only the order changes. In this example the ending-balance gap is $1,049,769, which demonstrates why an average return alone does not describe a withdrawal portfolio's path.
First five annual returns in each scenario
| Year | Bad early | Entered order | Good early |
|---|---|---|---|
| 1 | -12.0% | +10.0% | +14.0% |
| 2 | -9.0% | +6.0% | +12.0% |
| 3 | -8.0% | -4.0% | +11.0% |
| 4 | -6.0% | +8.0% | +10.0% |
| 5 | -5.0% | -12.0% | +10.0% |
Withdrawals are applied at the beginning of each year, then increased by inflation for the next year. If a requested withdrawal exceeds the available balance, the scenario is marked as depleted in that year.
Questions about this scenario
Does a 60/40 portfolio avoid sequence-of-returns risk?
No. Holding both stocks and bonds can change the return path, but withdrawals can still interact badly with early losses. The result depends on the specific assets and spending schedule.
Does the calculator rebalance the 60/40 portfolio?
No. The example is a return-sequence illustration. It does not reconstruct stock and bond holdings or simulate a rebalancing policy.
Run your own sequence
Use the full sequence-of-returns risk calculator to change the balance, withdrawal, inflation, and annual returns. Guardfolio's other tools cover concentration, volatility, rebalancing bands, and ETF overlap.