Have you ever been told you’ll have enough money to last the rest of your life? It’s a comforting idea, but have you ever tested it?

Think of a stress test like going to the doctor. They put you on a treadmill, bump up the incline and speed, and monitor how your heart reacts. If something looks off, they stop the test right away to figure out what’s wrong.

Now imagine doing the same kind of test—but for your retirement plan. Just like your heart, your income strategy might look fine when things are calm. But what happens if the market drops or inflation kicks up? That’s when we find out if your plan is truly healthy.

A good retirement strategy needs to handle pressure. It’s not just about feeling good today—it’s about making sure you don’t run out of money later on. And that’s exactly what a financial stress test does. It puts your plan through tough situations to see how it holds up.

The Problem With “Wall Street Math”

Many advisors use what I call “Wall Street Math.” They assume you’ll earn the same average return every year for the rest of your life.

But that’s not how real life works.

Markets go up and down. If your plan doesn’t account for bad years, it’s like stepping on a treadmill that never speeds up—there’s no challenge, no real test.

Here’s the truth: if you’re still working, market dips might not hurt too much. But after you retire, the timing of those dips matters…a lot! A bad year early in retirement could cause long-term damage that’s hard to recover from.

That’s why your plan should be tested against different return scenarios, not just a simple average.

Real-Life Example: A Couple at Risk of Running Out of Money

Let me share a real example. A retired couple, aged 68 and 69, came to me with concerns. They had $400,000 saved, and 100% of it was in stocks. That’s risky.

Now, the problem wasn’t the size of their savings. It was the rate at which they were withdrawing money. They were pulling out about 5.5% of their portfolio each year, and that number would only go up over time to keep up with inflation.

Let’s break it down:

Portfolio Size	Annual Withdrawal	Withdrawal Rate
$400,000	$22,000	5.5%

Even if they had $4 million instead of $400,000, taking out 5–7% every year still puts them at risk of running out of money.

Why Average Returns Can Be Misleading

Their previous advisor showed them a plan using a 7% average return. According to that, their money would last until age 100. Sounds great, right?

But that’s not how markets work. You don’t get a neat 7% every year. Sometimes it’s -10%, sometimes +15%, and everything in between.

So we ran a stress test using the real historical returns of the S&P 500 starting from the year 2000. This was a tough stretch in the market, with back-to-back downturns early on.

Here’s what the results looked like:

Scenario	Result
7% Average Return	Money lasts to age 100
Historical Market (2000)	Money runs out in their early 80s

The outcome changed dramatically just by swapping in real returns instead of a flat average.

How Guaranteed Income Can Strengthen a Retirement Plan

So what’s the fix when someone’s in this kind of situation? The answer is often adding guaranteed income, usually through an income annuity.

An income annuity gives you a much higher payout than you could safely withdraw from a regular investment account. This means:

- Your essential living expenses are covered.

- The pressure on your portfolio goes down.

- You’re free to ride the market ups and downs with less stress.

When we added guaranteed income to this couple’s plan, the results improved even in that same worst-case scenario.

Strategy	Outcome
Stocks Only	Ran out of money early 80s
With Income Annuity	Lasted to age 100, even in a downturn

This is what we call the ATLAS Annuity Strategy. It helps people stay protected while still having room to grow.

This Isn’t Fear—It’s Realistic Planning

Some people think this kind of planning is about fear. It’s not. It’s about facing reality.

The market conditions we used in our stress test? They actually happened. People who retired in 2000 lived through those returns.

We’re not guessing or trying to scare anyone—we’re just preparing for what’s possible. That’s smart planning.

Planning for the Best Case Too

If we look at the worst, we should also look at the best.

We ran a second test using strong market returns, like those from 1995 and onward. In that case, the couple actually came out ahead by sticking with their current plan.

And I’m not afraid to show that. Sometimes the annuity strategy wins. Sometimes it doesn’t. But you can’t count on the best case every time.

You have to make decisions based on what protects you—even if things go sideways.

Understanding the Purpose of Your Money

This is where the conversation often shifts.

What’s the purpose of your money?

- Is it to create a guaranteed income for the rest of your life?

- Or is it to leave behind a large inheritance, even if it means living with risk?

This couple’s current setup wasn’t doing either very well. The ATLAS Annuity Strategy gave them the income they needed to live, plus the chance to grow what was left.

It balanced safety and opportunity, without gambling their future.

Final Thoughts and How to Stress Test Your Own Plan

If your retirement plan hasn’t been stress tested, it’s time to get on the treadmill.

Let’s see how it holds up under real pressure—just like your doctor would do for your heart. You might find out that small changes today can prevent major problems down the road.

If you’re curious whether the Atlas Annuity Strategy is right for you, click the Book a Call button. We’ll have a short conversation and take it from there.

And if you’re just starting to explore annuities, I highly recommend watching the “20% More Spendable Income in Retirement” video series.

Episode #69: Stress Testing Your Retirement Plan