Plan for a market drop: how much could you lose and still be okay?

What the planner does

You enter cash on hand, yearly expenses, and upload a portfolio CSV (or type holdings). The tool simulates a drop (e.g. 50%) from today’s values and tells you: runway now, runway after the drop, and how much extra “safe” money you’d need to cover a chosen number of years. It suggests which holdings to sell first—prioritizing taxable accounts and ordering by tax impact: losses first, then small gains, then large gains.

Why sell order matters

Selling at a loss can offset gains or income (tax loss harvesting). Selling small gains usually costs less tax than selling big gains. So the planner sorts suggested sales by estimated gain %: losses first, then small gains, then large gains. It also respects account type: taxable first, then—if you enable “include protected”—retirement/IRA/401(k) and similar. That way you only tap protected accounts when you choose to.

How long did past crashes take to recover?

History doesn’t predict the future, but it shows that big drawdowns have happened and that recoveries varied a lot. Below: major S&P 500 drawdowns (peak to trough) and years until the index reached a new high. Data is approximate.

A 50% drop is a severe scenario; many drops were smaller and recovered faster. Planning for 2–5 years of runway in a 50% drop can reduce the need to sell at the worst time.