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Here’s the little sister Jill’s example again. We see that she has retired now in 1999. Although in this example, we’re going to review her year end value in her account in 2019. And see that we had just over a million dollars. Exactly $1,313,875 actually. We average her return at 6.58% being in the S and P 500 from 1999, till 2019. And her total change and account value is now a positive 162.78%. How did we do that? Well, if you notice for year end account value, it’s starting at $597,650. That’s because we got a $97,650 increase in market performance in the first year.
But let’s look at this key number in a little bit more detail. Her beginning value in this account is no longer a million dollars. It’s only $500,000, but do you see anything in the annual withdrawal column coming out here? No, it’s all zeros. She’s not taking any money out so sequence of returns does not affect her portfolio. And she has half the money that she originally planned to invest in the S and P 500 invested in the S and P 500. So where did the other half go? Let’s get the answer to that question next.