How do stress tests work?

Your plan assumes things go roughly to plan. The stress tests under What if things go wrong? on the Retirement Tracker show what happens when they do not. Each card names a scenario, its kind (Market crash, High inflation, Living longer, Loss of income or Exchange rate) and the historical episode or choice behind it. Tick as many as you like.

One line, not one per test

Whatever you tick is drawn as one line against Your plan: all of those things landing on the same household. Your own plan line stays where it is. Under the cards the page lists what the line is made of, beginning The line on the chart is this one scenario: or The line on the chart is all … of these happening to you:. When several tests are combined:

• Two longer-life tests take the longer, never the sum — five and ten extra years are two severities of one event.
• Inflation shocks add together.
• Two market falls in the same year count as the deeper one, not one on top of the other.
• Income cuts multiply: half pay inside a year of no pay is no pay.

Reading “If this happened”

Between the chart and the cards, If this happened puts figures on the gap: Your savings run out (and how many years earlier), At the day you stop working and By the end of the plan (how much less than your plan), You would be taking (the withdrawal rate instead of yours) and While you are still working, if the tests push you below zero before you stop. Some tests act only after you stop working — a crash five years in, a longer life — so they change nothing on the day you stop and show up only at the end.