Last Update: 30 April 2023
Do you have in mind a 20 years retirement, investing in the US Large Cap asset class?
According to the historical returns and stats of the asset class, which has been a sustainable withdrawal rate to live off your investiment?
Worst case scenario so far, over a 20-year time horizon, you could have withdrawn 3.301% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 20 years.
Considering the last 20 years (last update: April 2023), a safe withdrawal rate would have been 8.6%.
The last 20 years of the US Large Cap asset class
Over the last 20 years (last update: April 2023), the asset class has returned 9.93% annualized, with a maximum drawdown of -50.8%.
Timeframes ending at Apr 2023 |
Withdrawal Rate (%) |
Investment Performances |
||||
---|---|---|---|---|---|---|
Timeframe | Period from | Period to | Perpetual | Safe | Ann.Return(%) [ Infl.Adj. ] |
Max Drawdown(%) |
20 Years |
1 May 2003 |
30 Apr 2023 | 6.464 | 8.600 |
9.93 [ 7.21 ] |
-50.80 Nov 2007 - Feb 2009 |
For a complete view of the asset class and all the possible strategies, please refer to US Large Cap page.
Withdrawal Rates Simulation (updated at Apr 2023)
How much would it be an acceptable withdrawal rate, for the US Large Cap asset class?
Analyzing the available data source, all the 20-years timeframes have been considered to calculate the withdrawal rates and their success percentage.
PWR (%) - Perpetual Withdrawal Rate
|
SWR (%) - Safe Withdrawal Rate
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Preserved Capital | 100% | 75% | 50% | 25% | 0% | 0% | 0% | 0% | 0% | |
Success Rate | 100% | 100% | 100% | 100% | 100% | 95% | 90% | 80% | 50% | |
Minimum Worst Period (from) |
0.000 May 1901 |
0.819 Sep 1929 |
1.647 Sep 1929 |
2.474 Sep 1929 |
3.301 Sep 1929 |
4.813 95% Succ. |
5.282 90% Succ. |
6.051 80% Succ. |
8.825 50% Succ. |
|
Median |
6.289 |
6.896 |
7.560 |
8.170 |
8.825 | |||||
Average |
6.278 |
6.936 |
7.594 |
8.252 |
8.910 | |||||
Maximum Best Period (from) |
16.023 Jun 1949 |
16.428 Jun 1949 |
16.833 Jun 1949 |
17.299 Jul 1932 |
17.821 Jul 1932 |
Key Withdrawal Rates (%) |
Success Rate | |||||
---|---|---|---|---|---|---|
100% | 95% | 90% | 80% | 50% | ||
Preserved Capital | 100% |
0.000 |
1.618 |
2.158 |
3.062 |
6.289 |
75% |
0.819 |
2.441 |
3.059 |
3.814 |
6.896 |
|
50% |
1.647 |
3.378 |
3.772 |
4.641 |
7.560 |
|
25% |
2.474 |
4.163 |
4.587 |
5.361 |
8.170 |
|
0% |
3.301 |
4.813 |
5.282 |
6.051 |
8.825 |
PWR (%) - Perpetual Withdrawal Rate
|
SWR (%) - Safe Withdrawal Rate
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Preserved Capital | 100% | 75% | 50% | 25% | 0% | 0% | 0% | 0% | 0% | |
Success Rate | 100% | 100% | 100% | 100% | 100% | 95% | 90% | 80% | 50% | |
Minimum Worst Period (from) |
0.000 Sep 1929 |
0.819 Sep 1929 |
1.647 Sep 1929 |
2.474 Sep 1929 |
3.301 Sep 1929 |
4.633 95% Succ. |
4.921 90% Succ. |
5.728 80% Succ. |
8.938 50% Succ. |
|
Median |
6.501 |
7.132 |
7.785 |
8.385 |
8.938 | |||||
Average |
6.489 |
7.125 |
7.761 |
8.396 |
9.032 | |||||
Maximum Best Period (from) |
16.023 Jun 1949 |
16.428 Jun 1949 |
16.833 Jun 1949 |
17.299 Jul 1932 |
17.821 Jul 1932 |
Key Withdrawal Rates (%) |
Success Rate | |||||
---|---|---|---|---|---|---|
100% | 95% | 90% | 80% | 50% | ||
Preserved Capital | 100% |
0.000 |
1.417 |
1.992 |
2.802 |
6.501 |
75% |
0.819 |
2.313 |
2.892 |
3.563 |
7.132 |
|
50% |
1.647 |
3.179 |
3.614 |
4.336 |
7.785 |
|
25% |
2.474 |
3.929 |
4.271 |
5.053 |
8.385 |
|
0% |
3.301 |
4.633 |
4.921 |
5.728 |
8.938 |
PWR (%) - Perpetual Withdrawal Rate
|
SWR (%) - Safe Withdrawal Rate
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Preserved Capital | 100% | 75% | 50% | 25% | 0% | 0% | 0% | 0% | 0% | |
Success Rate | 100% | 100% | 100% | 100% | 100% | 95% | 90% | 80% | 50% | |
Minimum Worst Period (from) |
1.769 Apr 2000 |
2.440 Apr 2000 |
3.110 Apr 2000 |
3.780 Apr 2000 |
4.450 Apr 2000 |
4.953 95% Succ. |
5.563 90% Succ. |
6.985 80% Succ. |
9.972 50% Succ. |
|
Median |
6.957 |
7.679 |
8.415 |
9.178 |
9.972 | |||||
Average |
7.146 |
7.722 |
8.297 |
8.873 |
9.448 | |||||
Maximum Best Period (from) |
14.243 Aug 1982 |
14.773 Aug 1982 |
15.304 Aug 1982 |
15.835 Aug 1982 |
16.365 Aug 1982 |
Key Withdrawal Rates (%) |
Success Rate | |||||
---|---|---|---|---|---|---|
100% | 95% | 90% | 80% | 50% | ||
Preserved Capital | 100% |
1.769 |
2.615 |
3.452 |
4.819 |
6.957 |
75% |
2.440 |
3.175 |
3.949 |
5.440 |
7.679 |
|
50% |
3.110 |
3.751 |
4.465 |
5.980 |
8.415 |
|
25% |
3.780 |
4.341 |
4.979 |
6.437 |
9.178 |
|
0% |
4.450 |
4.953 |
5.563 |
6.985 |
9.972 |
Withdrawals and Success Rate
If you had implemented a specific Withdrawal Strategy with the US Large Cap asset class, over 20 years, 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 20-year timeframes available in the data source. To focus on a specific withdrawal rate, click on the links in the table.
Withdrawal Rate |
20 Years
|
% Fail
|
% Success over 20 Years - on % Preserved Capital
|
|||||
---|---|---|---|---|---|---|---|---|
% Success | Percentile | No Capital Preserved |
0% Preserved |
25% Preserved |
50% Preserved |
75% Preserved |
100% Preserved |
|
2.00 % |
100.00
|
0.00 |
100.00
|
100.00
|
99.75
|
97.67
|
91.76
|
|
2.50 % |
100.00
|
0.00 |
100.00
|
99.94
|
99.37
|
94.90
|
85.84
|
|
3.00 % |
100.00
|
100% Succ. 3.301% |
0.00 |
100.00
|
99.75
|
97.55
|
90.75
|
80.43
|
3.50 % |
99.87
|
0.13 |
99.87
|
99.12
|
93.96
|
83.51
|
76.53
|
|
4.00 % |
99.75
|
0.25 |
99.75
|
96.22
|
87.35
|
78.35
|
73.13
|
|
4.50 % |
97.99
|
95% Succ. 4.813% |
2.01 |
97.99
|
91.06
|
81.31
|
74.26
|
68.28
|
5.00 % |
92.70
|
90% Succ. 5.282% |
7.30 |
92.70
|
83.83
|
77.09
|
69.16
|
62.93
|
5.50 % |
87.54
|
12.46 |
87.54
|
78.67
|
69.67
|
64.82
|
59.47
|
|
6.00 % |
80.68
|
80% Succ. 6.051% |
19.32 |
80.68
|
72.50
|
66.46
|
60.67
|
53.30
|
6.50 % |
74.07
|
25.93 |
74.07
|
68.47
|
62.74
|
54.88
|
46.95
|
|
7.00 % |
70.99
|
29.01 |
70.99
|
64.07
|
56.26
|
48.84
|
39.46
|
|
7.50 % |
66.90
|
33.10 |
66.90
|
58.46
|
50.47
|
41.79
|
33.54
|
|
8.00 % |
60.67
|
39.33 |
60.67
|
52.05
|
44.43
|
34.68
|
28.95
|
Withdrawal Rate |
20 Years
|
% Fail
|
% Success over 20 Years - on % Preserved Capital
|
|||||
---|---|---|---|---|---|---|---|---|
% Success | Percentile | No Capital Preserved |
0% Preserved |
25% Preserved |
50% Preserved |
75% Preserved |
100% Preserved |
|
2.00 % |
100.00
|
0.00 |
100.00
|
100.00
|
99.58
|
97.19
|
89.80
|
|
2.50 % |
100.00
|
0.00 |
100.00
|
99.90
|
99.06
|
93.44
|
83.87
|
|
3.00 % |
100.00
|
100% Succ. 3.301% |
0.00 |
100.00
|
99.58
|
96.57
|
88.35
|
78.15
|
3.50 % |
99.79
|
0.21 |
99.79
|
98.54
|
91.26
|
80.33
|
73.99
|
|
4.00 % |
99.58
|
0.42 |
99.58
|
93.86
|
83.77
|
74.92
|
70.66
|
|
4.50 % |
96.67
|
95% Succ. 4.633% |
3.33 |
96.67
|
86.68
|
77.73
|
71.49
|
66.70
|
5.00 % |
88.14
|
11.86 |
88.14
|
80.23
|
73.47
|
68.47
|
62.02
|
|
5.50 % |
82.21
|
80% Succ. 5.728% |
17.79 |
82.21
|
75.55
|
68.89
|
64.10
|
59.73
|
6.00 % |
77.84
|
22.16 |
77.84
|
70.86
|
66.39
|
60.87
|
55.46
|
|
6.50 % |
72.84
|
27.16 |
72.84
|
67.43
|
62.96
|
56.30
|
50.05
|
|
7.00 % |
69.82
|
30.18 |
69.82
|
64.20
|
57.23
|
51.40
|
42.98
|
|
7.50 % |
65.66
|
34.34 |
65.66
|
59.21
|
52.45
|
44.95
|
37.57
|
|
8.00 % |
60.25
|
39.75 |
60.25
|
53.69
|
47.24
|
38.29
|
32.99
|
Withdrawal Rate |
20 Years
|
% Fail
|
% Success over 20 Years - on % Preserved Capital
|
|||||
---|---|---|---|---|---|---|---|---|
% Success | Percentile | No Capital Preserved |
0% Preserved |
25% Preserved |
50% Preserved |
75% Preserved |
100% Preserved |
|
2.00 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
100.00
|
99.72
|
|
2.50 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
99.72
|
96.95
|
|
3.00 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
98.34
|
93.35
|
|
3.50 % |
100.00
|
0.00 |
100.00
|
100.00
|
98.89
|
93.63
|
89.47
|
|
4.00 % |
100.00
|
100% Succ. 4.450% |
0.00 |
100.00
|
99.17
|
93.63
|
89.75
|
86.15
|
4.50 % |
99.17
|
95% Succ. 4.953% |
0.83 |
99.17
|
93.91
|
89.47
|
86.15
|
83.10
|
5.00 % |
94.46
|
5.54 |
94.46
|
89.75
|
86.98
|
83.10
|
79.22
|
|
5.50 % |
90.58
|
90% Succ. 5.563% |
9.42 |
90.58
|
87.26
|
82.27
|
79.50
|
76.45
|
6.00 % |
87.26
|
12.74 |
87.26
|
82.27
|
79.78
|
76.73
|
70.91
|
|
6.50 % |
82.83
|
80% Succ. 6.985% |
17.17 |
82.83
|
79.78
|
77.01
|
71.75
|
60.66
|
7.00 % |
79.78
|
20.22 |
79.78
|
77.56
|
72.30
|
65.37
|
49.03
|
|
7.50 % |
77.01
|
22.99 |
77.01
|
72.85
|
65.93
|
54.02
|
40.72
|
|
8.00 % |
72.85
|
27.15 |
72.85
|
67.04
|
60.66
|
43.21
|
35.73
|
Related Pages
Asset Class Main Page:
US Large Cap Asset Class
For the US Large Cap 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