All World ex-US Stock Market: a good asset for your retirement?

Last Update: 31 October 2024

All World ex-US Stock Market is an asset class belonging to Stocks category.

You can invest in this asset class, let it passively follow the market trend, and in the meantime you can periodically withdraw a portion of it for your retirement.

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.376% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.

Considering the last 30-year (last update: October 2024), a safe withdrawal rate would have been 4.28%.

In this post, we will find out the most affordable withdrawal strategies. All calculations are made on actual historical series.

All World ex-US Stock Market asset class

Over the last 30 years (last update: October 2024), the asset class has returned 4.9% annualized, with a maximum drawdown of -58.35%.

Let's consider different timeframes, all ending at October 2024: which Withdrawal Rates could you have applied without running out of money in your retirement?

The Withdrawal Rates calculated here are annualized and refer to the initial capital (not the current!). The first month withdrawal is 1/12 of that annualized withdrawal and it's adjusted for inflation for each subsequent month.

A Perpetual Withdrawal Rate (PWR) protected the original inflation adjusted capital.

A Safe Withdrawal Rate (SWR) didn't protect the original capital, but the investment didn't run out of money during retirement. The capital went to zero exaclty at the end of the retirement period.

Learn more about Withdrawal Rate simulation

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Timeframes ending at Oct 2024			Withdrawal Rate (%)		Investment Performances
Timeframe	Period from	Period to	Perpetual	Safe	Ann.Return(%) [ Infl.Adj. ]	Max Drawdown(%)
10 Years	1 Nov 2014	31 Oct 2024	1.970	10.676	5.01 [ 2.06 ]	-27.60 Jun 2021 - Sep 2022
20 Years	1 Nov 2004	31 Oct 2024	3.440	7.302	5.86 [ 3.24 ]	-58.35 Nov 2007 - Feb 2009
30 Years	1 Nov 1994	31 Oct 2024	2.126	4.280	4.90 [ 2.31 ]	-58.35 Nov 2007 - Feb 2009
40 Years	1 Nov 1984	31 Oct 2024	7.736	9.082	7.81 [ 4.89 ]	-58.35 Nov 2007 - Feb 2009
50 Years	1 Nov 1974	31 Oct 2024	6.072	6.727	8.65 [ 4.77 ]	-58.35 Nov 2007 - Feb 2009

Simulations are calculated with actual returns of All World ex-US Stock Market Asset Class | Preserved capital and withdrawals are considered adjusted for inflation | Withdrawals happen monthly | Performances are calculated in USD dollars, considering reinvestment of dividends when applicable | Inflation is updated at October 2024

Withdrawal Rates Simulation (updated at Oct 2024)

During your retirement, tipically you want to divest periodically some amount of money from your invested capital, without running out of money over a long period.

How much would it be an acceptable withdrawal rate, for the All World ex-US Stock Market asset class?

▼ Methodology and Definitions

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):

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 Withdrawal Rates calculated here are annualized and refer to the initial capital (not the current!). The first month withdrawal is 1/12 of that annualized withdrawal and it's adjusted for inflation for each subsequent month.

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

Analyzing the available data source, several N-years timeframes have been considered to calculate the withdrawal rates and their success percentage.

For instance, given a 20 years timeframe, the algorithm will cover each 20 year timeframe starting at every possible month in the given period between the start and end month (Oct 2024).

Period: Nov 1974 - Oct 2024

Table Chart

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		PWR (%) - Perpetual Withdrawal Rate				SWR (%) - Safe Withdrawal Rate
Preserved Capital (Infl.Adj)		100%	75%	50%	25%	0%	0%	0%	0%	0%
Success Rate		100%	100%	100%	100%	100%	95%	90%	80%	50%
Timeframes	10 Years Worst Period (from)	0.000 Oct 1988	0.126 Mar 1999	3.482 Nov 2007	5.421 Nov 2007	7.361 Nov 2007	8.619	9.259	10.033	11.752
	20 Years Worst Period (from)	0.000 Nov 1988	0.000 Mar 1989	1.558 Mar 1989	3.131 Mar 1989	4.476 Jan 1990	4.934	5.235	5.782	7.416
	30 Years Worst Period (from)	1.230 Jan 1989	1.815 Jan 1989	2.374 Jan 1990	2.875 Jan 1990	3.376 Jan 1990	3.620	3.849	4.364	7.313

Legend:

SWR 100% Success

95% Success

90% Success

Legend:

PWR 100% Capital Protection

75%

50% Protection

25%

Withdrawals and Success Rate

If you had implemented a specific Withdrawal Strategy with the All World ex-US Stock Market asset class, which would have been the success rate so far?

Simulations follow the same rules mentioned before. Withdrawals are expressed as yearly rates and refer to the initial capital. After that, withdrawal amount is monthly adjusted for inflation.

Success rates are calculated over all the past timeframes available in the data source. To focus on a specific withdrawal rate, click on the links in the table.

Period: Nov 1974 - Oct 2024

Table Chart

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Withdrawal Rate	10 Years	10 Years	20 Years	20 Years	30 Years	30 Years
Withdrawal Rate	% Success	Percentile	% Success	Percentile	% Success	Percentile
2.00 %	100.00		100.00		100.00
2.50 %	100.00		100.00		100.00
3.00 %	100.00		100.00		100.00	100% Succ. 3.376%
3.50 %	100.00		100.00		98.34	95% Succ. 3.620%
4.00 %	100.00		100.00	100% Succ. 4.476%	86.31	80% Succ. 4.364%
4.50 %	100.00		99.72	95% Succ. 4.934%	77.18
5.00 %	100.00		94.74	90% Succ. 5.235%	67.22
5.50 %	100.00		86.15	80% Succ. 5.782%	62.24
6.00 %	100.00		72.58		57.68
6.50 %	100.00		57.89		56.85
7.00 %	100.00	100% Succ. 7.361%	54.02	50% Succ. 7.416%	55.60	50% Succ. 7.313%
7.50 %	99.79		49.58		45.23
8.00 %	98.96		43.77		36.93

Asset Class Main Page:
All World ex-US Stock Market Asset Class

For the All World ex-US Stock Market Asset Class, we have prepared a report for each available timeframe:
10-Year 20-Year 30-Year

if you want to learn more about the statistics of a specific withdrawal rate, we suggest these in particular:
2% 2.5% 3% 3.5% 4% 4.5% 5%

Website Homepage:
BestRetirementPortfolio.com

All World ex-US Stock Market asset class

Withdrawal Rates Simulation (updated at Oct 2024)

Withdrawals and Success Rate

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