US Intermediate Term (3-7y) Treasuries: a good asset for your retirement?

Last Update: 31 January 2024

US Intermediate Term (3-7y) Treasuries is an asset class belonging to Fixed Income 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Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 2.453% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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: January 2024), a safe withdrawal rate would have been 5.02%.

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

US Intermediate Term (3-7y) Treasuries asset class

Over the last 30 years (last update: January 2024), the asset class has returned 4.12% annualized, with a maximum drawdown of -13.59%.

Let's consider different timeframes, all ending at January 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 Jan 2024
Withdrawal Rate (%)
Investment Performances
Timeframe Period from Period to Perpetual Safe Ann.Return(%)
[ Infl.Adj. ]
Max
Drawdown(%)
20 Years 1 Feb 2004
31 Jan 2024 0.199 5.736 2.76
[ 0.18 ]
-13.59
Aug 2020 - Oct 2022
30 Years 1 Feb 1994
31 Jan 2024 1.862 5.020 4.12
[ 1.56 ]
-13.59
Aug 2020 - Oct 2022
40 Years 1 Feb 1984
31 Jan 2024 4.280 6.113 5.95
[ 3.06 ]
-13.59
Aug 2020 - Oct 2022
50 Years 1 Feb 1974
31 Jan 2024 2.568 3.663 6.39
[ 2.44 ]
-13.59
Aug 2020 - Oct 2022
60 Years 1 Feb 1964
31 Jan 2024 1.870 2.663 6.03
[ 2.04 ]
-13.59
Aug 2020 - Oct 2022
70 Years 1 Feb 1954
31 Jan 2024 1.667 2.283 5.50
[ 1.89 ]
-13.59
Aug 2020 - Oct 2022
Simulations are calculated with actual returns of US Intermediate Term (3-7y) Treasuries 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 January 2024

Withdrawal Rates Simulation (updated at Jan 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 US Intermediate Term (3-7y) Treasuries 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. In this website, you can find PWRs with 100% Capital Protection, or less.

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. In this website, you can find SWRs with 100% Success rate, or less.

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 (Jan 2024).

Period: Jan 1871 - Jan 2024
Swipe left to see all data
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 20 Years
Worst Period (from)
0.000
May 1897
0.000
Jan 1899
0.933
Aug 1939
2.364
Aug 1939
3.652
Feb 1941
4.144 4.597 4.817 5.886
30 Years
Worst Period (from)
0.000
May 1890
0.000
Jun 1939
0.739
May 1940
1.626
Nov 1940
2.453
Feb 1941
2.800 3.041 3.455 4.071
40 Years
Worst Period (from)
0.000
Feb 1933
0.000
Nov 1938
0.145
Sep 1941
0.998
Aug 1941
1.826
Feb 1941
2.049 2.235 2.773 3.253
50 Years
Worst Period (from)
0.000
Feb 1931
0.210
Jun 1934
0.733
Jun 1934
1.189
Jun 1939
1.506
Feb 1941
1.707 1.782 2.363 2.824
60 Years
Worst Period (from)
0.608
Oct 1915
0.839
Aug 1939
1.020
Aug 1939
1.201
Aug 1939
1.377
Feb 1941
1.525 1.606 2.070 2.453
70 Years
Worst Period (from)
0.234
Aug 1911
0.635
May 1911
1.028
May 1911
1.188
Aug 1939
1.304
Feb 1941
1.426 1.491 1.823 2.144
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Feb 1924 - Jan 2024
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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 20 Years
Worst Period (from)
0.000
Apr 1932
0.000
Sep 1938
0.933
Aug 1939
2.364
Aug 1939
3.652
Feb 1941
4.015 4.234 4.730 5.612
30 Years
Worst Period (from)
0.000
Oct 1932
0.000
Jun 1939
0.739
May 1940
1.626
Nov 1940
2.453
Feb 1941
2.688 2.814 3.187 3.796
40 Years
Worst Period (from)
0.000
Feb 1933
0.000
Nov 1938
0.145
Sep 1941
0.998
Aug 1941
1.826
Feb 1941
1.988 2.063 2.277 3.099
50 Years
Worst Period (from)
0.000
Feb 1931
0.210
Jun 1934
0.733
Jun 1934
1.189
Jun 1939
1.506
Feb 1941
1.587 1.706 1.780 2.670
60 Years
Worst Period (from)
0.658
Aug 1939
0.839
Aug 1939
1.020
Aug 1939
1.201
Aug 1939
1.377
Feb 1941
1.428 1.514 1.580 2.253
70 Years
Worst Period (from)
0.838
Jul 1939
0.955
Aug 1939
1.072
Aug 1939
1.188
Aug 1939
1.304
Feb 1941
1.336 1.386 1.458 1.855
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Feb 1974 - Jan 2024
Swipe left to see all data
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 20 Years
Worst Period (from)
0.000
Jul 2003
1.399
Oct 2003
2.816
Jul 2003
4.217
Jun 2003
5.580
Feb 1974
5.886 6.140 6.385 7.286
30 Years
Worst Period (from)
1.714
Nov 1993
2.538
Nov 1993
3.361
Oct 1993
4.182
Oct 1993
4.558
Feb 1974
4.977 5.048 5.165 5.998
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Simulations are calculated with actual returns of US Intermediate Term (3-7y) Treasuries 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 January 2024

Withdrawals and Success Rate

If you had implemented a specific Withdrawal Strategy with the US Intermediate Term (3-7y) Treasuries 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: Jan 1871 - Jan 2024
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Withdrawal
Rate
20 Years
30 Years
40 Years
50 Years
60 Years
70 Years
% Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile
2.00 %
100.00
100.00
100% Succ.
2.453%
96.98
95% Succ.
2.049%
86.35
80% Succ.
2.363%
82.38
80% Succ.
2.070%
63.23
50% Succ.
2.144%
2.50 %
100.00
99.39
95% Succ.
2.800%
86.75
80% Succ.
2.773%
73.18
50% Succ.
2.824%
46.69
32.67
3.00 %
100.00
90.73
90% Succ.
3.041%
68.56
50% Succ.
3.253%
40.31
21.82
19.14
3.50 %
100.00
100% Succ.
3.652%
77.40
42.86
19.47
14.85
12.32
4.00 %
97.25
95% Succ.
4.144%
51.62
50% Succ.
4.071%
29.16
12.60
9.66
7.41
4.50 %
92.24
90% Succ.
4.597%
44.38
20.54
7.19
5.90
5.71
5.00 %
72.03
38.50
14.36
5.25
4.65
4.51
5.50 %
54.82
50% Succ.
5.886%
26.73
10.31
4.20
3.04
2.40
6.00 %
49.19
18.88
8.10
2.99
1.16
0.00
6.50 %
43.37
12.92
5.82
1.62
0.00
0.00
7.00 %
36.17
9.34
3.83
0.00
0.00
0.00
7.50 %
27.53
6.36
1.77
0.00
0.00
0.00
8.00 %
19.27
3.79
0.15
0.00
0.00
0.00
Period: Feb 1924 - Jan 2024
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Withdrawal
Rate
20 Years
30 Years
40 Years
50 Years
60 Years
70 Years
% Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile
2.00 %
100.00
100.00
100% Succ.
2.453%
94.31
90% Succ.
2.063%
71.88
61.12
50% Succ.
2.253%
43.77
2.50 %
100.00
98.93
95% Succ.
2.688%
75.17
59.73
50% Succ.
2.670%
34.51
4.16
3.00 %
100.00
83.71
80% Succ.
3.187%
57.28
50% Succ.
3.099%
26.79
0.00
0.00
3.50 %
100.00
100% Succ.
3.652%
70.63
50% Succ.
3.796%
35.78
3.49
0.00
0.00
4.00 %
95.42
95% Succ.
4.015%
46.61
21.64
0.00
0.00
0.00
4.50 %
87.83
80% Succ.
4.730%
38.88
13.18
0.00
0.00
0.00
5.00 %
70.45
34.72
9.43
0.00
0.00
0.00
5.50 %
53.07
50% Succ.
5.612%
21.05
7.49
0.00
0.00
0.00
6.00 %
45.16
14.15
6.24
0.00
0.00
0.00
6.50 %
38.09
8.56
3.74
0.00
0.00
0.00
7.00 %
32.05
6.66
2.36
0.00
0.00
0.00
7.50 %
23.83
3.80
0.42
0.00
0.00
0.00
8.00 %
13.63
2.02
0.00
0.00
0.00
0.00
Period: Feb 1974 - Jan 2024
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Withdrawal
Rate
20 Years
30 Years
% Success Percentile % Success Percentile
2.00 %
100.00
100.00
2.50 %
100.00
100.00
3.00 %
100.00
100.00
3.50 %
100.00
100.00
4.00 %
100.00
100.00
4.50 %
100.00
100.00
100% Succ.
4.558%
5.00 %
100.00
94.19
90% Succ.
5.048%
5.50 %
100.00
100% Succ.
5.580%
70.54
50% Succ.
5.998%
6.00 %
92.80
90% Succ.
6.140%
49.38
6.50 %
77.01
29.88
7.00 %
62.33
50% Succ.
7.286%
23.24
7.50 %
42.11
13.28
8.00 %
25.21
7.05
Simulations are calculated with actual returns of US Intermediate Term (3-7y) Treasuries 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 January 2024

Related Pages

Asset Class Main Page:
US Intermediate Term (3-7y) Treasuries Asset Class

For the US Intermediate Term (3-7y) Treasuries Asset Class, we have prepared a report for each available timeframe:
20-Year    30-Year    40-Year    50-Year    60-Year    70-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