Last Update: 30 April 2023
Do you have in mind a 20 years retirement, investing in the US Small 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Worst case scenario so far, over a 20-year time horizon, you could have withdrawn 3.38% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 20 years.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 10.841%.
The last 20 years of the US Small Cap asset class
Over the last 20 years (last update: April 2023), the asset class has returned 10.02% annualized, with a maximum drawdown of -54.13%.
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 | 8.190 | 10.841 |
10.02 [ 7.29 ] |
-54.13 Jun 2007 - Feb 2009 |
For a complete view of the asset class and all the possible strategies, please refer to US Small Cap page.
Withdrawal Rates Simulation (updated at Apr 2023)
How much would it be an acceptable withdrawal rate, for the US Small 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 |
0.000 Jun 1912 |
0.898 Jul 1912 |
2.920 Sep 1929 |
3.380 Sep 1929 |
5.549 95% Succ. |
5.950 90% Succ. |
7.560 80% Succ. |
9.962 50% Succ. |
|
Median |
7.867 |
8.411 |
8.906 |
9.385 |
9.962 | |||||
Average |
8.288 |
8.806 |
9.329 |
9.853 |
10.377 | |||||
Maximum Best Period (from) |
27.616 Jul 1932 |
27.943 Jul 1932 |
28.269 Jul 1932 |
28.595 Jul 1932 |
28.921 Jul 1932 |
Key Withdrawal Rates (%) |
Success Rate | |||||
---|---|---|---|---|---|---|
100% | 95% | 90% | 80% | 50% | ||
Preserved Capital | 100% |
0.000 |
2.303 |
3.378 |
5.341 |
7.867 |
75% |
0.000 |
3.241 |
4.062 |
5.869 |
8.411 |
|
50% |
0.898 |
3.959 |
4.850 |
6.405 |
8.906 |
|
25% |
2.920 |
4.734 |
5.363 |
6.895 |
9.385 |
|
0% |
3.380 |
5.549 |
5.950 |
7.560 |
9.962 |
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) |
1.538 Sep 1929 |
1.999 Sep 1929 |
2.459 Sep 1929 |
2.920 Sep 1929 |
3.380 Sep 1929 |
5.972 95% Succ. |
7.342 90% Succ. |
8.486 80% Succ. |
11.262 50% Succ. |
|
Median |
9.361 |
9.857 |
10.315 |
10.794 |
11.262 | |||||
Average |
9.998 |
10.394 |
10.789 |
11.184 |
11.579 | |||||
Maximum Best Period (from) |
27.616 Jul 1932 |
27.943 Jul 1932 |
28.269 Jul 1932 |
28.595 Jul 1932 |
28.921 Jul 1932 |
Key Withdrawal Rates (%) |
Success Rate | |||||
---|---|---|---|---|---|---|
100% | 95% | 90% | 80% | 50% | ||
Preserved Capital | 100% |
1.538 |
4.807 |
5.949 |
7.049 |
9.361 |
75% |
1.999 |
5.137 |
6.298 |
7.413 |
9.857 |
|
50% |
2.459 |
5.451 |
6.653 |
7.792 |
10.315 |
|
25% |
2.920 |
5.720 |
6.998 |
8.165 |
10.794 |
|
0% |
3.380 |
5.972 |
7.342 |
8.486 |
11.262 |
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) |
5.094 May 2002 |
5.662 May 2002 |
6.173 May 1998 |
6.676 May 1998 |
7.179 May 1998 |
8.183 95% Succ. |
8.898 90% Succ. |
9.891 80% Succ. |
11.979 50% Succ. |
|
Median |
10.079 |
10.522 |
11.022 |
11.539 |
11.979 | |||||
Average |
10.664 |
11.106 |
11.549 |
11.992 |
12.435 | |||||
Maximum Best Period (from) |
20.990 Jan 1975 |
21.271 Jan 1975 |
21.551 Jan 1975 |
21.832 Jan 1975 |
22.112 Jan 1975 |
Key Withdrawal Rates (%) |
Success Rate | |||||
---|---|---|---|---|---|---|
100% | 95% | 90% | 80% | 50% | ||
Preserved Capital | 100% |
5.094 |
6.090 |
6.435 |
7.793 |
10.079 |
75% |
5.662 |
6.648 |
7.077 |
8.376 |
10.522 |
|
50% |
6.173 |
7.161 |
7.691 |
8.876 |
11.022 |
|
25% |
6.676 |
7.683 |
8.294 |
9.380 |
11.539 |
|
0% |
7.179 |
8.183 |
8.898 |
9.891 |
11.979 |
Withdrawals and Success Rate
If you had implemented a specific Withdrawal Strategy with the US Small 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
|
99.81
|
98.36
|
96.66
|
|
2.50 % |
100.00
|
0.00 |
100.00
|
100.00
|
99.56
|
97.67
|
94.08
|
|
3.00 % |
100.00
|
100% Succ. 3.380% |
0.00 |
100.00
|
99.94
|
98.62
|
95.97
|
91.69
|
3.50 % |
99.94
|
0.06 |
99.94
|
99.62
|
97.55
|
93.52
|
88.92
|
|
4.00 % |
99.69
|
0.31 |
99.69
|
98.87
|
94.84
|
90.43
|
87.16
|
|
4.50 % |
99.31
|
0.69 |
99.31
|
96.60
|
92.01
|
87.54
|
84.14
|
|
5.00 % |
98.49
|
1.51 |
98.49
|
93.20
|
88.67
|
83.95
|
82.13
|
|
5.50 % |
95.53
|
95% Succ. 5.549% |
4.47 |
95.53
|
88.99
|
84.52
|
82.25
|
78.79
|
6.00 % |
89.36
|
10.64 |
89.36
|
85.78
|
82.32
|
78.92
|
73.38
|
|
6.50 % |
86.15
|
13.85 |
86.15
|
83.20
|
79.42
|
74.26
|
66.58
|
|
7.00 % |
83.83
|
16.17 |
83.83
|
79.30
|
74.70
|
67.78
|
60.79
|
|
7.50 % |
80.68
|
80% Succ. 7.560% |
19.32 |
80.68
|
75.27
|
68.16
|
60.79
|
55.38
|
8.00 % |
75.96
|
24.04 |
75.96
|
68.79
|
61.49
|
54.94
|
48.58
|
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
|
99.90
|
99.58
|
|
2.50 % |
100.00
|
0.00 |
100.00
|
100.00
|
99.90
|
99.58
|
98.86
|
|
3.00 % |
100.00
|
100% Succ. 3.380% |
0.00 |
100.00
|
99.90
|
99.58
|
98.86
|
98.44
|
3.50 % |
99.90
|
0.10 |
99.90
|
99.58
|
98.86
|
98.34
|
97.29
|
|
4.00 % |
99.48
|
0.52 |
99.48
|
98.86
|
98.13
|
97.09
|
96.57
|
|
4.50 % |
98.86
|
1.14 |
98.86
|
97.81
|
96.98
|
96.25
|
95.84
|
|
5.00 % |
97.71
|
2.29 |
97.71
|
96.88
|
96.05
|
95.21
|
94.28
|
|
5.50 % |
96.46
|
95% Succ. 5.972% |
3.54 |
96.46
|
95.63
|
94.59
|
93.55
|
92.40
|
6.00 % |
94.90
|
5.10 |
94.90
|
93.86
|
93.34
|
91.47
|
89.59
|
|
6.50 % |
93.65
|
6.35 |
93.65
|
92.61
|
90.95
|
88.76
|
84.81
|
|
7.00 % |
91.99
|
90% Succ. 7.342% |
8.01 |
91.99
|
89.91
|
88.03
|
84.50
|
80.33
|
7.50 % |
89.07
|
10.93 |
89.07
|
87.20
|
82.62
|
78.88
|
75.13
|
|
8.00 % |
85.64
|
14.36 |
85.64
|
81.69
|
77.73
|
73.88
|
67.22
|
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
|
100.00
|
|
2.50 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
|
3.00 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
|
3.50 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
|
4.00 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
|
4.50 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
|
5.00 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
|
5.50 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
100.00
|
98.61
|
|
6.00 % |
100.00
|
0.00 |
100.00
|
100.00
|
100.00
|
98.61
|
95.84
|
|
6.50 % |
100.00
|
0.00 |
100.00
|
100.00
|
98.89
|
96.68
|
89.20
|
|
7.00 % |
100.00
|
100% Succ. 7.179% |
0.00 |
100.00
|
98.89
|
96.68
|
90.30
|
87.26
|
7.50 % |
99.17
|
0.83 |
99.17
|
96.68
|
91.14
|
87.26
|
83.93
|
|
8.00 % |
96.95
|
3.05 |
96.95
|
91.97
|
87.53
|
83.93
|
76.73
|
Related Pages
Asset Class Main Page:
US Small Cap Asset Class
For the US Small 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