Have you ever thought of how much you can withdraw monthly/yearly from your portfolio, during your retirement?
At first, figure out how long your retirement might be. Now choose:
- Do you want to preserve your initial capital, adjusted for inflation?
- You don't care about eating away all your invested capital at the end of your retirement?
In the first case, look at the Perpetual Withdrawal Rate
The Perpetual Withdrawal Rate (PWR) is the percentage of the initial portfolio balance that can be withdrawn at the beginning of each month with inflation adjustment, preserving the original invested capital, adjusted for inflation too.
In the second case, look at the Safe Withdrawal Rate
The Safe Withdrawal Rate (SWR) is the percentage of the initial portfolio balance that can be withdrawn at the beginning of each month with inflation adjustment, without the portfolio running out of money.
Each N-years timeframe has been considered to calculate withdrawal rates.
For instance, with a 20 years timeframe, the algorithm is covering each 20 year timeframe starting from the beginning, and continuing month after month.
For instance, with a 20 years timeframe, the algorithm is covering each 20 year timeframe starting from the beginning, and continuing month after month.
Each N-years timeframe has been considered to calculate withdrawal rates.
For instance, with a 20 years timeframe, the algorithm is covering each 20 year timeframe starting from the beginning, and continuing month after month.
For instance, with a 20 years timeframe, the algorithm is covering each 20 year timeframe starting from the beginning, and continuing month after month.
Each N-years timeframe has been considered to calculate withdrawal rates.
For instance, with a 20 years timeframe, the algorithm is covering each 20 year timeframe starting from the beginning, and continuing month after month.
For instance, with a 20 years timeframe, the algorithm is covering each 20 year timeframe starting from the beginning, and continuing month after month.
PWRs and SWRs are calculated over timeframes ending at October 2024.
For instance, with the 20 years timeframe, the algorithm is calculating withdrawal rates from November 2004 to October 2024.
For instance, with the 20 years timeframe, the algorithm is calculating withdrawal rates from November 2004 to October 2024.
Swipe left to see all data
Weighting % |
Perpetual Withdrawal Rate (%)
|
Safe Withdrawal Rate (%)
|
|||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | Stocks▾ | Bonds | Comm |
10 Years |
20 Years |
30 Years |
40 Years |
50 Years |
60 Years |
70 Years |
80 Years |
10 Years |
20 Years |
30 Years |
40 Years |
50 Years |
60 Years |
70 Years |
80 Years |
| US Stocks/Bonds 100/0 | 100 | 0 | 0 |
0.000
|
0.000
|
1.062
|
2.493
|
2.391
|
2.526
|
2.581
|
2.562
|
5.426
|
3.326
|
2.895
|
2.782
|
2.693
|
2.636
|
2.615
|
2.605
|
| US Stocks/Bonds 90/10 | 90 | 10 | 0 |
0.000
|
0.000
|
1.318
|
2.796
|
2.665
|
2.817
|
2.880
|
2.858
|
6.307
|
3.861
|
3.312
|
3.157
|
3.035
|
2.955
|
2.926
|
2.911
|
| Warren Buffett Portfolio | 90 | 10 | 0 |
0.000
|
0.000
|
1.785
|
2.688
|
2.534
|
2.717
|
2.792
|
2.763
|
6.411
|
3.787
|
3.237
|
3.084
|
2.958
|
2.869
|
2.838
|
2.823
|
| US Stocks/Bonds 80/20 | 80 | 20 | 0 |
0.000
|
0.000
|
1.509
|
2.873
|
2.901
|
3.072
|
3.144
|
3.118
|
7.252
|
4.422
|
3.731
|
3.519
|
3.354
|
3.245
|
3.205
|
3.184
|
| US Stocks/Bonds 70/30 | 70 | 30 | 0 |
0.000
|
0.000
|
1.644
|
2.871
|
2.954
|
3.176
|
3.188
|
3.140
|
7.642
|
4.674
|
3.961
|
3.692
|
3.453
|
3.352
|
3.306
|
3.264
|
| US Stocks/Bonds 60/40 | 60 | 40 | 0 |
0.000
|
0.000
|
1.731
|
2.786
|
2.805
|
3.028
|
3.037
|
2.973
|
7.811
|
4.748
|
3.999
|
3.616
|
3.369
|
3.251
|
3.194
|
3.140
|
| US Stocks/Bonds 50/50 | 50 | 50 | 0 |
0.000
|
0.000
|
1.778
|
2.570
|
2.621
|
2.842
|
2.846
|
2.760
|
7.870
|
4.811
|
3.953
|
3.526
|
3.267
|
3.130
|
3.057
|
2.989
|
| US Stocks/Bonds 40/60 | 40 | 60 | 0 |
0.000
|
0.000
|
1.544
|
1.846
|
2.398
|
2.597
|
2.572
|
2.488
|
7.824
|
4.823
|
3.851
|
3.423
|
3.114
|
2.950
|
2.873
|
2.808
|
| Golden Butterfly | 40 | 40 | 20 |
0.000
|
0.000
|
0.905
|
1.848
|
2.158
|
2.340
|
2.357
|
2.409
|
7.667
|
4.543
|
3.589
|
3.153
|
2.897
|
2.742
|
2.653
|
2.593
|
| US Stocks/Bonds 30/70 | 30 | 70 | 0 |
0.000
|
0.000
|
1.128
|
1.046
|
1.937
|
2.154
|
2.172
|
2.142
|
7.771
|
4.719
|
3.733
|
3.155
|
2.763
|
2.589
|
2.505
|
2.446
|
| Desert Portfolio | 30 | 60 | 10 |
0.000
|
0.000
|
0.674
|
1.392
|
1.910
|
2.091
|
2.102
|
2.044
|
7.646
|
4.557
|
3.565
|
3.126
|
2.736
|
2.571
|
2.485
|
2.431
|
| All Weather Portfolio | 30 | 55 | 15 |
0.000
|
0.000
|
0.365
|
1.022
|
1.817
|
1.972
|
1.916
|
1.845
|
7.495
|
4.502
|
3.449
|
2.932
|
2.621
|
2.464
|
2.388
|
2.313
|
| Permanent Portfolio | 25 | 50 | 25 |
0.000
|
0.000
|
0.327
|
0.976
|
1.526
|
1.636
|
1.632
|
1.738
|
7.639
|
4.392
|
3.304
|
2.679
|
2.354
|
2.193
|
2.094
|
2.038
|
| US Stocks/Bonds 20/80 | 20 | 80 | 0 |
0.000
|
0.000
|
0.667
|
0.227
|
1.274
|
1.687
|
1.659
|
1.697
|
7.704
|
4.601
|
3.435
|
2.726
|
2.337
|
2.182
|
2.096
|
2.037
|
| US Stocks/Bonds 10/90 | 10 | 90 | 0 |
0.000
|
0.000
|
0.000
|
0.000
|
0.473
|
1.175
|
1.026
|
1.140
|
7.618
|
4.145
|
2.929
|
2.255
|
1.903
|
1.758
|
1.674
|
1.616
|
| Short Term Treasury | 0 | 100 | 0 |
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.444
|
0.345
|
0.588
|
7.569
|
3.462
|
2.339
|
1.793
|
1.486
|
1.347
|
1.250
|
1.180
|
| 10-year Treasury | 0 | 100 | 0 |
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.386
|
0.000
|
0.000
|
7.493
|
3.585
|
2.375
|
1.737
|
1.405
|
1.286
|
1.222
|
1.180
|
| US Stocks/Bonds 0/100 | 0 | 100 | 0 |
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.629
|
0.257
|
0.450
|
7.491
|
3.660
|
2.461
|
1.834
|
1.513
|
1.384
|
1.307
|
1.252
|
| Gold | 0 | 0 | 100 |
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
4.590
|
1.726
|
1.063
|
0.912
|
1.107
|
0.887
|
0.710
|
0.611
|
Swipe left to see all data
Weighting % |
Perpetual Withdrawal Rate (%)
|
Safe Withdrawal Rate (%)
|
|||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | Stocks▾ | Bonds | Comm |
10 Years |
20 Years |
30 Years |
40 Years |
50 Years |
60 Years |
70 Years |
80 Years |
10 Years |
20 Years |
30 Years |
40 Years |
50 Years |
60 Years |
70 Years |
80 Years |
| US Stocks/Bonds 100/0 | 100 | 0 | 0 |
0.000
|
0.205
|
2.343
|
2.493
|
2.391
|
2.526
|
2.581
|
2.562
|
5.426
|
3.326
|
2.895
|
2.782
|
2.693
|
2.636
|
2.615
|
2.605
|
| US Stocks/Bonds 90/10 | 90 | 10 | 0 |
0.000
|
0.622
|
2.649
|
2.796
|
2.665
|
2.817
|
2.880
|
2.858
|
6.307
|
3.861
|
3.312
|
3.157
|
3.035
|
2.955
|
2.926
|
2.911
|
| Warren Buffett Portfolio | 90 | 10 | 0 |
0.000
|
0.319
|
2.576
|
2.688
|
2.534
|
2.717
|
2.792
|
2.763
|
6.411
|
3.787
|
3.237
|
3.084
|
2.958
|
2.869
|
2.838
|
2.823
|
| US Stocks/Bonds 80/20 | 80 | 20 | 0 |
0.000
|
1.046
|
2.931
|
2.873
|
2.901
|
3.072
|
3.144
|
3.118
|
7.252
|
4.422
|
3.731
|
3.519
|
3.354
|
3.245
|
3.205
|
3.184
|
| US Stocks/Bonds 70/30 | 70 | 30 | 0 |
0.000
|
0.867
|
2.912
|
2.888
|
3.074
|
3.267
|
3.349
|
3.319
|
7.642
|
4.674
|
3.961
|
3.692
|
3.518
|
3.486
|
3.431
|
3.403
|
| US Stocks/Bonds 60/40 | 60 | 40 | 0 |
0.000
|
0.646
|
2.793
|
2.882
|
3.161
|
3.364
|
3.396
|
3.404
|
7.811
|
4.748
|
3.999
|
3.707
|
3.521
|
3.590
|
3.531
|
3.488
|
| US Stocks/Bonds 50/50 | 50 | 50 | 0 |
0.000
|
0.368
|
2.654
|
2.570
|
2.866
|
3.004
|
3.047
|
3.060
|
7.968
|
4.811
|
4.022
|
3.702
|
3.438
|
3.287
|
3.219
|
3.170
|
| US Stocks/Bonds 40/60 | 40 | 60 | 0 |
0.000
|
0.000
|
2.116
|
1.846
|
2.424
|
2.597
|
2.655
|
2.674
|
8.111
|
4.845
|
3.962
|
3.539
|
3.114
|
2.950
|
2.873
|
2.819
|
| Golden Butterfly | 40 | 40 | 20 |
0.233
|
1.758
|
2.344
|
2.458
|
2.847
|
2.908
|
2.963
|
2.983
|
8.754
|
5.216
|
4.096
|
3.560
|
3.286
|
3.168
|
3.105
|
3.069
|
| US Stocks/Bonds 30/70 | 30 | 70 | 0 |
0.000
|
0.000
|
1.395
|
1.046
|
1.937
|
2.154
|
2.232
|
2.256
|
8.240
|
4.842
|
3.862
|
3.155
|
2.763
|
2.589
|
2.505
|
2.446
|
| Desert Portfolio | 30 | 60 | 10 |
0.000
|
0.759
|
1.379
|
1.392
|
1.966
|
2.135
|
2.219
|
2.252
|
8.611
|
4.997
|
3.757
|
3.126
|
2.736
|
2.571
|
2.485
|
2.431
|
| All Weather Portfolio | 30 | 55 | 15 |
0.000
|
0.000
|
1.000
|
1.022
|
1.823
|
2.052
|
2.154
|
2.191
|
8.501
|
4.932
|
3.630
|
2.932
|
2.621
|
2.464
|
2.388
|
2.343
|
| Permanent Portfolio | 25 | 50 | 25 |
0.000
|
0.042
|
0.458
|
0.976
|
1.526
|
1.636
|
1.749
|
1.811
|
8.368
|
4.590
|
3.304
|
2.679
|
2.354
|
2.193
|
2.094
|
2.038
|
| US Stocks/Bonds 20/80 | 20 | 80 | 0 |
0.000
|
0.000
|
0.667
|
0.227
|
1.274
|
1.687
|
1.737
|
1.799
|
8.351
|
4.646
|
3.435
|
2.726
|
2.337
|
2.182
|
2.096
|
2.037
|
| US Stocks/Bonds 10/90 | 10 | 90 | 0 |
0.000
|
0.000
|
0.000
|
0.000
|
0.473
|
1.175
|
1.250
|
1.306
|
8.103
|
4.145
|
2.929
|
2.255
|
1.903
|
1.758
|
1.674
|
1.616
|
| Short Term Treasury | 0 | 100 | 0 |
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.444
|
0.653
|
0.588
|
7.569
|
3.462
|
2.339
|
1.793
|
1.486
|
1.347
|
1.250
|
1.180
|
| 10-year Treasury | 0 | 100 | 0 |
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.596
|
0.809
|
0.858
|
7.643
|
3.585
|
2.375
|
1.737
|
1.405
|
1.286
|
1.222
|
1.180
|
| US Stocks/Bonds 0/100 | 0 | 100 | 0 |
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.663
|
0.805
|
0.848
|
7.812
|
3.660
|
2.461
|
1.834
|
1.513
|
1.384
|
1.307
|
1.252
|
| Gold | 0 | 0 | 100 |
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.000
|
0.395
|
4.590
|
1.726
|
1.063
|
0.912
|
1.277
|
1.149
|
0.992
|
0.928
|
Swipe left to see all data
Weighting % |
Perpetual Withdrawal Rate (%)
|
Safe Withdrawal Rate (%)
|
|||||||
|---|---|---|---|---|---|---|---|---|---|
| Portfolio | Stocks▾ | Bonds | Comm |
10 Years |
20 Years |
30 Years |
10 Years |
20 Years |
30 Years |
| US Stocks/Bonds 100/0 | 100 | 0 | 0 |
0.000
|
2.010
|
5.841
|
7.497
|
4.682
|
6.866
|
| US Stocks/Bonds 90/10 | 90 | 10 | 0 |
0.000
|
2.170
|
5.807
|
7.923
|
4.928
|
6.890
|
| Warren Buffett Portfolio | 90 | 10 | 0 |
0.000
|
1.815
|
5.735
|
7.584
|
4.645
|
6.627
|
| US Stocks/Bonds 80/20 | 80 | 20 | 0 |
0.000
|
2.318
|
5.740
|
8.357
|
5.170
|
6.891
|
| US Stocks/Bonds 70/30 | 70 | 30 | 0 |
0.000
|
2.451
|
5.639
|
8.797
|
5.407
|
6.705
|
| US Stocks/Bonds 60/40 | 60 | 40 | 0 |
0.000
|
2.567
|
5.381
|
9.242
|
5.637
|
6.465
|
| US Stocks/Bonds 50/50 | 50 | 50 | 0 |
0.000
|
2.663
|
4.872
|
9.691
|
5.857
|
6.215
|
| US Stocks/Bonds 40/60 | 40 | 60 | 0 |
0.000
|
2.736
|
4.324
|
10.127
|
6.067
|
5.954
|
| Golden Butterfly | 40 | 40 | 20 |
2.208
|
4.552
|
4.789
|
11.495
|
7.357
|
6.088
|
| US Stocks/Bonds 30/70 | 30 | 70 | 0 |
0.713
|
2.390
|
3.734
|
9.890
|
6.244
|
5.685
|
| Desert Portfolio | 30 | 60 | 10 |
1.378
|
3.080
|
3.930
|
10.703
|
6.639
|
5.911
|
| All Weather Portfolio | 30 | 55 | 15 |
1.035
|
3.460
|
4.425
|
10.257
|
6.995
|
5.985
|
| Permanent Portfolio | 25 | 50 | 25 |
0.720
|
3.181
|
3.455
|
10.788
|
6.400
|
5.117
|
| US Stocks/Bonds 20/80 | 20 | 80 | 0 |
0.091
|
1.693
|
3.100
|
9.645
|
6.292
|
5.409
|
| US Stocks/Bonds 10/90 | 10 | 90 | 0 |
0.000
|
0.933
|
2.418
|
9.393
|
6.035
|
5.123
|
| Short Term Treasury | 0 | 100 | 0 |
0.000
|
0.000
|
0.488
|
9.320
|
4.879
|
4.248
|
| 10-year Treasury | 0 | 100 | 0 |
0.000
|
0.494
|
2.194
|
8.494
|
5.643
|
4.719
|
| US Stocks/Bonds 0/100 | 0 | 100 | 0 |
0.000
|
0.110
|
1.685
|
9.085
|
5.761
|
4.809
|
| Gold | 0 | 0 | 100 |
0.000
|
0.000
|
0.000
|
4.590
|
1.726
|
1.063
|
Swipe left to see all data
Weighting % |
PWR (%) - Ending at Oct 2024
|
SWR (%) - Ending at Oct 2024
|
|||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | Stocks▾ | Bonds | Comm |
10 Years |
20 Years |
30 Years |
40 Years |
50 Years |
60 Years |
70 Years |
80 Years |
10 Years |
20 Years |
30 Years |
40 Years |
50 Years |
60 Years |
70 Years |
80 Years |
| US Stocks/Bonds 100/0 | 100 | 0 | 0 |
8.430
|
6.250
|
7.927
|
9.293
|
7.989
|
3.865
|
7.416
|
8.216
|
14.395
|
8.046
|
8.840
|
9.688
|
8.159
|
3.974
|
7.480
|
8.241
|
| US Stocks/Bonds 90/10 | 90 | 10 | 0 |
7.625
|
5.919
|
7.567
|
8.963
|
7.569
|
3.779
|
6.761
|
7.347
|
13.977
|
7.915
|
8.586
|
9.414
|
7.767
|
3.907
|
6.838
|
7.381
|
| Warren Buffett Portfolio | 90 | 10 | 0 |
7.941
|
5.601
|
7.412
|
9.298
|
6.955
|
3.421
|
6.483
|
7.353
|
14.069
|
7.559
|
8.448
|
9.755
|
7.156
|
3.554
|
6.566
|
7.389
|
| US Stocks/Bonds 80/20 | 80 | 20 | 0 |
6.782
|
5.540
|
7.166
|
8.592
|
7.130
|
3.673
|
6.124
|
6.496
|
13.548
|
7.761
|
8.306
|
9.111
|
7.364
|
3.825
|
6.218
|
6.541
|
| US Stocks/Bonds 70/30 | 70 | 30 | 0 |
5.899
|
5.110
|
6.722
|
8.181
|
6.674
|
3.544
|
5.506
|
5.669
|
13.111
|
7.584
|
8.004
|
8.781
|
6.952
|
3.726
|
5.621
|
5.729
|
| US Stocks/Bonds 60/40 | 60 | 40 | 0 |
4.976
|
4.626
|
6.236
|
7.728
|
6.200
|
3.392
|
4.907
|
4.874
|
12.664
|
7.385
|
7.681
|
8.425
|
6.533
|
3.612
|
5.050
|
4.956
|
| US Stocks/Bonds 50/50 | 50 | 50 | 0 |
4.012
|
4.085
|
5.705
|
7.232
|
5.707
|
3.214
|
4.327
|
4.118
|
12.211
|
7.165
|
7.340
|
8.046
|
6.109
|
3.482
|
4.507
|
4.229
|
| US Stocks/Bonds 40/60 | 40 | 60 | 0 |
3.005
|
3.483
|
5.129
|
6.692
|
5.194
|
3.008
|
3.766
|
3.406
|
11.751
|
6.925
|
6.982
|
7.646
|
5.681
|
3.338
|
3.993
|
3.556
|
| Golden Butterfly | 40 | 40 | 20 |
3.616
|
5.013
|
5.642
|
6.521
|
6.445
|
4.513
|
4.732
|
3.941
|
11.980
|
8.191
|
7.168
|
7.310
|
6.841
|
4.744
|
4.874
|
4.030
|
| US Stocks/Bonds 30/70 | 30 | 70 | 0 |
1.955
|
2.818
|
4.503
|
6.103
|
4.657
|
2.771
|
3.219
|
2.740
|
11.286
|
6.665
|
6.612
|
7.227
|
5.251
|
3.180
|
3.509
|
2.944
|
| Desert Portfolio | 30 | 60 | 10 |
2.515
|
3.507
|
4.708
|
5.850
|
4.672
|
3.118
|
3.414
|
2.804
|
11.349
|
7.149
|
6.629
|
6.886
|
5.236
|
3.492
|
3.673
|
2.985
|
| All Weather Portfolio | 30 | 55 | 15 |
1.938
|
3.705
|
5.486
|
7.186
|
4.897
|
3.136
|
3.211
|
2.667
|
11.329
|
7.452
|
7.365
|
8.134
|
5.381
|
3.451
|
3.433
|
2.825
|
| Permanent Portfolio | 25 | 50 | 25 |
2.980
|
4.355
|
4.271
|
4.740
|
4.002
|
3.225
|
3.125
|
2.353
|
11.560
|
7.846
|
6.070
|
5.789
|
4.631
|
3.635
|
3.412
|
2.562
|
| US Stocks/Bonds 20/80 | 20 | 80 | 0 |
0.861
|
2.086
|
3.826
|
5.464
|
4.094
|
2.498
|
2.685
|
2.120
|
10.816
|
6.388
|
6.230
|
6.792
|
4.823
|
3.008
|
3.057
|
2.397
|
| US Stocks/Bonds 10/90 | 10 | 90 | 0 |
0.000
|
1.284
|
3.094
|
4.769
|
3.499
|
2.183
|
2.157
|
1.541
|
10.344
|
6.095
|
5.840
|
6.344
|
4.398
|
2.823
|
2.638
|
1.918
|
| Short Term Treasury | 0 | 100 | 0 |
0.000
|
0.000
|
0.729
|
2.128
|
2.072
|
1.546
|
1.534
|
0.803
|
9.320
|
4.944
|
4.391
|
4.529
|
3.629
|
2.697
|
2.415
|
1.518
|
| 10-year Treasury | 0 | 100 | 0 |
0.000
|
0.623
|
3.233
|
5.303
|
3.085
|
1.901
|
1.625
|
0.968
|
9.838
|
6.141
|
6.268
|
6.993
|
4.031
|
2.591
|
2.161
|
1.412
|
| US Stocks/Bonds 0/100 | 0 | 100 | 0 |
0.000
|
0.409
|
2.302
|
4.014
|
2.867
|
1.819
|
1.627
|
0.994
|
9.870
|
5.788
|
5.443
|
5.885
|
3.978
|
2.627
|
2.252
|
1.506
|
| Gold | 0 | 0 | 100 |
4.638
|
7.495
|
2.765
|
1.470
|
1.147
|
3.137
|
1.964
|
0.946
|
11.316
|
10.392
|
4.073
|
2.434
|
1.940
|
3.655
|
2.350
|
1.271
|
The algorithm calculates the chance of success of a initial withdrawal rate, whose amount in dollars is adjusted monthly for inflation.
The algorithm tries a retirement simulation, starting at every possible month in the given period.
For instance, assuming a 20 years retirement, the algorithm will cover each 20 year timeframe starting at every possible month in the given period between the start and end month.
Here's how simulations work (each simulation is based on actual asset class returns, in US dollars):
The Perpetual Withdrawal Rate (PWR) is the percentage of the initial portfolio balance that can be withdrawn at the beginning of each month with inflation adjustment, preserving the original invested capital, adjusted for inflation too.
The Safe Withdrawal Rate (SWR) is the percentage of the initial portfolio balance that can be withdrawn at the beginning of each month with inflation adjustment, without the portfolio running out of money.
Learn more about Withdrawal Rate simulation
Data Sources and Credits
For instance, assuming a 20 years retirement, the algorithm will cover each 20 year timeframe starting at every possible month in the given period between the start and end month.
Here's how simulations work (each simulation is based on actual asset class returns, in US dollars):
- At the beginning, you start with a certain amount of money invested in the portfolio (i.e. the initial invested capital).
- Each month, money is withdrawn from the portfolio. The withdrawal rate is calculated based on the initial withdrawn, annualized.
- Each month, portfolio value is updated, based on the asset classes returns (dividends are supposed to be reinvested).
- Each month, portfolio is rebalanced, to reset to the original weight of the assets (applicable only if portfolio contains at least 2 assets).
- Each month, the withdrawal is adjusted for inflation (US Inflation is used for simulation).
The Perpetual Withdrawal Rate (PWR) is the percentage of the initial portfolio balance that can be withdrawn at the beginning of each month with inflation adjustment, preserving the original invested capital, adjusted for inflation too.
The Safe Withdrawal Rate (SWR) is the percentage of the initial portfolio balance that can be withdrawn at the beginning of each month with inflation adjustment, without the portfolio running out of money.
Learn more about Withdrawal Rate simulation
Data Sources and Credits
