US Long Term (20y+) Treasuries: 7.5% withdrawal simulation

Last Update: 30 November 2024

You decided on a 7.5% withdrawal strategy and invested in the US Long Term (20y+) Treasuries asset class: how likely, so far, your investment would have been enough for your retirement?.

In this post, we will simulate different retirement timeframes and check the sustainability of the withdrawal rate, using actual historical series.

Key Points

You invested in the US Long Term (20y+) Treasuries asset class.

With a 7.5% withdrawal strategy, you would have lived on your investiment for 30 years in the 11.09% of cases, and for 50 years in the 0.48% of cases.

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 2.276% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.

Success Rate of a 7.5% Withdrawal Strategy

Let's calculate the success rate of a 7.5% Withdrawal Strategy, on the US Long Term (20y+) Treasuries asset class. Would you have also saved a portion of your invested capital, at the end of your retirement?

As usual, the withdrawal is expressed as a yearly rate and refers to the initial capital. After that, the withdrawal amount is monthly adjusted for inflation.

▼ 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  • Each month, money is withdrawn from the portfolio. The withdrawal rate is calculated based on the initial withdrawn, annualized.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

We are calculating the success rate over all the past N-year timeframes, on actual historical data, also focusing on how much capital (inflation adjusted) will remain after the retirement.

Period: Jan 1871 - Nov 2024
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7.5%
Withdrawal Rate
% Success
10 Years 20 Years 30 Years 40 Years 50 Years 60 Years 70 Years 80 Years
Success Rate (%)
At least 0% Preserved Capital
100.00
36.19
11.09
7.53
0.48
0.00
0.00
0.00
Fail Rate(%)
0.00
63.81
88.91
92.47
99.52
100.00
100.00
100.00
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 25%
65.28
24.44
9.48
6.65
0.00
0.00
0.00
0.00
At least 50%
47.28
12.69
8.47
5.26
0.00
0.00
0.00
0.00
At least 75%
28.24
10.14
7.53
3.95
0.00
0.00
0.00
0.00
At least 100%
10.24
8.77
6.38
2.41
0.00
0.00
0.00
0.00
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Period: Dec 1924 - Nov 2024
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7.5%
Withdrawal Rate
% Success
10 Years 20 Years 30 Years 40 Years 50 Years 60 Years 70 Years 80 Years
Success Rate (%)
At least 0% Preserved Capital
100.00
33.92
8.80
7.49
0.00
0.00
0.00
0.00
Fail Rate(%)
0.00
66.08
91.20
92.51
100.00
100.00
100.00
100.00
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 25%
58.37
19.35
8.20
6.80
0.00
0.00
0.00
0.00
At least 50%
43.66
8.43
7.85
5.96
0.00
0.00
0.00
0.00
At least 75%
24.61
7.18
7.49
5.27
0.00
0.00
0.00
0.00
At least 100%
6.75
6.66
6.42
4.16
0.00
0.00
0.00
0.00
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Period: Dec 1974 - Nov 2024
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7.5%
Withdrawal Rate
% Success
10 Years 20 Years 30 Years
Success Rate (%)
At least 0% Preserved Capital
100.00
70.91
30.71
Fail Rate(%)
0.00
29.09
69.29
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 25%
89.19
45.98
28.63
At least 50%
78.38
22.44
27.39
At least 75%
37.21
19.11
26.14
At least 100%
14.55
17.73
22.41
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Simulations are calculated with actual returns of US Long Term (20y+) 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 November 2024

7.5% vs Perpetual/Safe Withdrawal Rates

Let's compare a 7.5% withdrawal with the Safe and Perpetual Withdrawal Rates, over different timeframes.

In the table below, the guaranteed thresholds of Success/Preserved Capital are highlighted in green, elsewhere in red. To focus on a specific timeframe for this portfolio, click on the links in the table.

Period: Jan 1871 - Nov 2024
Period: Dec 1924 - Nov 2024
Period: Dec 1974 - Nov 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 10 Years
Worst Period (from) 		0.000
Feb 1897 		0.000
Jan 1909 		0.190
Oct 1971 		4.347
Oct 1971 		7.606
Apr 1916 		8.212 8.528 9.157 11.381
20 Years
Worst Period (from) 		0.000
Apr 1897 		0.000
Oct 1898 		0.000
Sep 1961 		1.995
Oct 1961 		3.622
Feb 1941 		3.929 4.191 4.628 5.884
30 Years
Worst Period (from) 		0.000
Feb 1890 		0.000
Dec 1937 		0.000
Mar 1950 		1.212
Apr 1950 		2.276
Feb 1946 		2.558 2.726 2.956 4.113
40 Years
Worst Period (from) 		0.000
Jun 1930 		0.000
Apr 1934 		0.000
Nov 1939 		0.328
Oct 1941 		1.553
Feb 1946 		1.736 2.001 2.366 3.304
50 Years
Worst Period (from) 		0.000
Nov 1929 		0.000
Mar 1930 		0.101
Oct 1931 		0.906
Jun 1934 		1.241
Feb 1941 		1.417 1.554 2.025 2.725
60 Years
Worst Period (from) 		0.112
Jul 1922 		0.662
May 1941 		0.823
Dec 1940 		0.979
Feb 1941 		1.135
Jan 1941 		1.295 1.357 1.768 2.334
70 Years
Worst Period (from) 		0.000
Nov 1910 		0.073
Oct 1911 		0.704
Oct 1911 		0.977
Feb 1941 		1.081
Jan 1941 		1.228 1.283 1.610 2.062
80 Years
Worst Period (from) 		0.000
Feb 1901 		0.175
Oct 1901 		0.696
Oct 1901 		0.994
Feb 1941 		1.049
Jan 1941 		1.189 1.247 1.669 1.929
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
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 10 Years
Worst Period (from) 		0.000
Oct 1936 		0.000
Nov 1940 		0.190
Oct 1971 		4.347
Oct 1971 		7.634
Feb 1946 		8.301 8.541 8.956 11.056
20 Years
Worst Period (from) 		0.000
Sep 1932 		0.000
Sep 1938 		0.000
Sep 1961 		1.995
Oct 1961 		3.622
Feb 1941 		3.812 3.960 4.296 5.387
30 Years
Worst Period (from) 		0.000
Sep 1932 		0.000
Dec 1937 		0.000
Mar 1950 		1.212
Apr 1950 		2.276
Feb 1946 		2.496 2.584 2.786 3.437
40 Years
Worst Period (from) 		0.000
Jun 1930 		0.000
Apr 1934 		0.000
Nov 1939 		0.328
Oct 1941 		1.553
Feb 1946 		1.686 1.743 2.026 2.614
50 Years
Worst Period (from) 		0.000
Nov 1929 		0.000
Mar 1930 		0.101
Oct 1931 		0.906
Jun 1934 		1.241
Feb 1941 		1.354 1.410 1.540 2.202
60 Years
Worst Period (from) 		0.478
Dec 1934 		0.662
May 1941 		0.823
Dec 1940 		0.979
Feb 1941 		1.135
Jan 1941 		1.214 1.282 1.341 1.866
70 Years
Worst Period (from) 		0.663
Feb 1941 		0.768
Feb 1941 		0.872
Feb 1941 		0.977
Feb 1941 		1.081
Jan 1941 		1.138 1.202 1.257 1.530
80 Years
Worst Period (from) 		0.787
Nov 1943 		0.870
Apr 1941 		0.933
Apr 1941 		0.994
Feb 1941 		1.049
Jan 1941 		1.092 1.118 1.198 1.291
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
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 10 Years
Worst Period (from) 		0.000
Dec 1974 		0.000
Nov 2013 		3.151
Dec 2014 		6.285
Mar 1975 		7.960
Jan 1977 		8.636 9.750 11.495 12.828
20 Years
Worst Period (from) 		0.808
Nov 2003 		2.423
Nov 2003 		3.985
Nov 2004 		4.907
Jan 1977 		5.475
Jan 1977 		5.816 6.050 7.145 8.099
30 Years
Worst Period (from) 		2.546
Nov 1993 		3.368
Nov 1993 		4.074
Jan 1977 		4.372
Jan 1977 		4.669
Jan 1977 		4.937 5.012 5.831 6.938
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Simulations are calculated with actual returns of US Long Term (20y+) 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 November 2024

Related Pages

Asset Class Main Page:
US Long Term (20y+) Treasuries Asset Class

For the US Long Term (20y+) Treasuries Asset Class, we have prepared a report for each available timeframe:
10-Year    20-Year    30-Year    40-Year    50-Year    60-Year    70-Year    80-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%   

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