Sequence-of-returns risk is the difference between “the market returned 7% on average” and “you ran out of money in 2018.” This page shows the exact year-by-year math on a real-world starting point: $1,000,000 invested Jan 1, 2000, withdrawing $50,000/yr for income, riding actual S&P 500 total returns through 2023.
Send me the sale price and rough basis. Within one business day I'll email you the actual number and the Seller's Guide to §453. If it doesn't fit your deal, I'll tell you that plainly.
No retainer · no obligation. Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
You’re 65. You just sold the property/business/asset. You have $1,000,000 in cash. You need $50,000/yr of retirement income. That’s a 5% withdrawal rate, well within the famous “4% rule” safe-withdrawal guideline. You put the whole $1M into a diversified S&P 500 index fund and start drawing.
It’s January 2000. The S&P 500 has averaged 7% over the long run. You feel fine.
The next three years (2000, 2001, 2002) will be the dot-com crash. Then 2008 will be the financial crisis. Then 2022 will be another double-digit drawdown. Each of those bear markets happens while you’re also withdrawing $50K/yr, locking in losses, shrinking the principal base that needs to compound back. This is sequence-of-returns risk.
Withdrawal of $50,000 at the start of each year, then the remainder rides the year’s S&P 500 total return (dividends reinvested). Negative years shaded red.
| Year | Start balance | Withdraw | Post-w/d | S&P return | End balance |
|---|---|---|---|---|---|
| 2000 | $1,000,000 | −$50,000 | $950,000 | −9.1% | $863,550 |
| 2001 | $863,550 | −$50,000 | $813,550 | −11.9% | $716,738 |
| 2002 | $716,738 | −$50,000 | $666,738 | −22.1% | $519,389 |
| 2003 | $519,389 | −$50,000 | $469,389 | +28.7% | $604,103 |
| 2004 | $604,103 | −$50,000 | $554,103 | +10.9% | $614,500 |
| 2005 | $614,500 | −$50,000 | $564,500 | +4.9% | $592,200 |
| 2006 | $592,200 | −$50,000 | $542,200 | +15.8% | $627,870 |
| 2007 | $627,870 | −$50,000 | $577,870 | +5.5% | $609,652 |
| 2008 | $609,652 | −$50,000 | $559,652 | −37.0% | $352,581 |
| 2009 | $352,581 | −$50,000 | $302,581 | +26.5% | $382,765 |
| 2010 | $382,765 | −$50,000 | $332,765 | +15.1% | $383,012 |
| 2011 | $383,012 | −$50,000 | $333,012 | +2.1% | $340,005 |
| 2012 | $340,005 | −$50,000 | $290,005 | +16.0% | $336,406 |
| 2013 | $336,406 | −$50,000 | $286,406 | +32.4% | $379,201 |
| 2014 | $379,201 | −$50,000 | $329,201 | +13.7% | $374,302 |
| 2015 | $374,302 | −$50,000 | $324,302 | +1.4% | $328,842 |
| 2016 | $328,842 | −$50,000 | $278,842 | +12.0% | $312,303 |
| 2017 | $312,303 | −$50,000 | $262,303 | +21.8% | $319,485 |
| 2018 | $319,485 | −$50,000 | $269,485 | −4.4% | $257,628 |
| 2019 | $257,628 | −$50,000 | $207,628 | +31.5% | $273,031 |
| 2020 | $273,031 | −$50,000 | $223,031 | +18.4% | $264,069 |
| 2021 | $264,069 | −$50,000 | $214,069 | +28.7% | $275,506 |
| 2022 | $275,506 | −$50,000 | $225,506 | −18.1% | $184,690 |
| 2023 | $184,690 | −$50,000 | $134,690 | +26.3% | $170,114 |
| 2024 start | $170,114 | (remaining) | n/a | n/a | $170,114 |
The S&P 500 averaged ~7.2% per year from 2000 to 2023 (total return, dividends reinvested). On paper that’s a great long-run return. But the order of the returns matters far more than the average when you’re drawing income:
The market produced its long-run average return. The portfolio still nearly went to zero. That’s sequence-of-returns risk. It’s the single biggest unaddressed risk in retirement income, and it’s the reason “just invest your sale proceeds in the market” isn’t actually a retirement plan; it’s a bet on the order of returns showing up favorably.
The Structured Installment Sale eliminates sequence risk on the portion of your wealth that’s structured because:
It’s an argument against putting 100% of your sale proceeds into the market and calling it a retirement plan. The two-pool framing solves this:
Sequence-of-returns risk doesn’t go away on the Pool B side, but the floor from Pool A means you don’t have to sell into a down market to fund the next month’s grocery bill. The structured floor lets the cash pool ride out bear markets without forced selling. That’s exactly the dynamic the 2000-vintage retiree in the table above didn’t have.
The S&P illustration above is the classic case. But the same dynamic hits three other places retirees rely on for income:
The advanced calculator models the same sequence-of-returns scenarios against your actual sale price, basis, age, and income. Twenty-minute call to walk through whether SIS, or SIS + cash carve-out, fits your situation.
Run your specific scenario → 213-414-2808
A plain-English guide for sellers on how a structured installment sale defers the tax when you sell a business, practice, or property. It covers the math, the alternatives, and how to tell if your deal fits.
Leave your details and the PDF downloads right away. Within one business day Hans will email a preliminary read on which structure fits your deal. No retainer. On a funded structure, the insurer pays a one-time commission of about 4% of the amount structured to the brokerage firm that places it (Hans’s share is about 2.4%; no trail). It is built into the annuity pricing, not a separate fee.
📞 Hans Goldstein · 213-414-2808 · CA Insurance License #4273294 · Independent §453 specialist · Goldstein & Co. LLC
Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
