Sequence Risk : Managing Retiree Exposure to Sequence Risk Through Probability of Failure Based Decision Rules

• This paper broadens the perspective on sustainable distributions by expanding into three dimensions, introducing transitory states as well as all those states existing simultaneously.• Withdrawal rates alone do not tell a complete sustainable distribution story; withdrawal rates are time dependent. • The Probability of Failure (POF), a time independent variable, is more useful for true comparison of withdrawal rates over any time period or asset allocation.• Comparison of POF surfaces, and their shift between strategies, illustrates how effective one strategy is as compared to another. • The methodology presented provides an ability to evaluate sustainable withdrawal rates and exposure to sequence risk together