Step 1 · Your situation

Run your IRA through both sequences

Same IRA balance. Same average market return. Same Uniform Lifetime Table. The only difference: bad years at the START of RMDs vs at the END. The IRS-forced selling does the rest of the damage.

Traditional IRA / 401(k) Balance

Pre-tax balance at RMD start

Current Age

RMDs begin at 73 (SECURE 2.0)

Plan-To Age

How long the IRA must last

Average Annual Return

Both scenarios share this exact mean

Bad-Year Severity

Depth of the worst years

Extra Lifestyle Withdrawal

$ per year ABOVE the RMD (if needed for lifestyle)

Cost of bad RMD timing

—

Bad timing

Bear market during EARLY RMD years

—

Good timing

Bear market at the END (or never)

—

Why this is worse than ordinary sequence risk

Pre-RMD retirees can pause withdrawals during a crash — live on cash, defer the IRA, wait it out. After 73, the IRS gives no such option. Miss an RMD and the penalty is 25% of the amount you should have taken (recently reduced from 50%). So you sell — into the loss — and the dollar-weighted return you actually experience is far worse than the published market average.

The annuity / IUL / bond-ladder pitch writes itself. Move some of the pre-RMD balance into vehicles that aren't market-linked (or that are partially protected) — or convert to Roth before 73 to kill the RMD altogether.

Loss-lock highlighted in red. Every year shown in red below is a year where you were forced to sell during a market loss. Those shares are gone — their future recovery doesn't help you. This is the structural reason that even “safe” 60/40 portfolios bleed faster than expected in retirement.

Age	Divisor	RMD %	BAD-FIRST balance	RMD taken	Return	GOOD-FIRST balance	RMD taken	Return

Want this on your real IRA?

Hans will pull your account balance and run the actual SECURE Act 2.0 RMD schedule against 100+ historical sequences, then show you where the lock-in risk concentrates and what tools (Roth conversion, MYGA, IUL, bond ladder) actually fix it. Free educational math help from a 501(c)(3) nonprofit.