US Small Cap: 20-year retirement

Last Update: 28 February 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Worst case scenario so far, over a 20-year time horizon, you could have withdrawn 3.38% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 20 years.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: February 2023), a safe withdrawal rate would have been 11.643%.

The last 20 years of the US Small Cap asset class

Over the last 20 years (last update: February 2023), the asset class has returned 10.98% annualized, with a maximum drawdown of -54.13%.

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 Feb 2023
Withdrawal Rate (%)
Investment Performances
Timeframe Period from Period to Perpetual Safe Ann.Return(%)
[ Infl.Adj. ]		 Max
Drawdown(%)
20 Years 1 Mar 2003
 28 Feb 2023 9.275 11.643 10.98
[ 8.29 ] 		-54.13
Jun 2007 - Feb 2009
Simulations are calculated with actual returns of US Small Cap 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 2023

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 Feb 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.

Legend:
SWR 100% Success
PWR 100% Capital Protection
Period: Jan 1871 - Feb 2023
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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. 		9.954
50% Succ.
Median 7.867
 8.405
 8.899
 9.385
 9.954
Average 8.288
 8.805
 9.328
 9.852
 10.376
Maximum
Best Period (from) 		27.616
Jul 1932 		27.943
Jul 1932 		28.269
Jul 1932 		28.595
Jul 1932 		28.921
Jul 1932
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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
 8.405
50% 0.898
 3.959
 4.850
 6.405
 8.899
25% 2.920
 4.734
 5.363
 6.895
 9.385
0% 3.380
 5.549
 5.950
 7.560
 9.954
Period: Mar 1923 - Feb 2023
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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. 		11.248
50% Succ.
Median 9.361
 9.865
 10.303
 10.789
 11.248
Average 9.993
 10.388
 10.784
 11.179
 11.574
Maximum
Best Period (from) 		27.616
Jul 1932 		27.943
Jul 1932 		28.269
Jul 1932 		28.595
Jul 1932 		28.921
Jul 1932
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Key
Withdrawal
Rates (%) 		Success Rate
100% 95% 90% 80% 50%
Preserved Capital 100% 1.538
 4.807
 5.949
 7.029
 9.361
75% 1.999
 5.137
 6.298
 7.384
 9.865
50% 2.459
 5.451
 6.653
 7.772
 10.303
25% 2.920
 5.720
 6.998
 8.139
 10.789
0% 3.380
 5.972
 7.342
 8.486
 11.248
Period: Mar 1973 - Feb 2023
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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. 		9.852
80% Succ. 		11.979
50% Succ.
Median 10.079
 10.522
 11.022
 11.539
 11.979
Average 10.665
 11.105
 11.546
 11.986
 12.427
Maximum
Best Period (from) 		20.990
Jan 1975 		21.271
Jan 1975 		21.551
Jan 1975 		21.832
Jan 1975 		22.112
Jan 1975
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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
 9.852
 11.979
Simulations are calculated with actual returns of US Small Cap 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 2023

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.

Period: Jan 1871 - Feb 2023
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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
98.61
95.97
91.68
3.50 %
99.94
0.06
99.94
99.62
97.54
93.51
88.91
4.00 %
99.68
0.32
99.68
98.87
94.83
90.42
87.15
4.50 %
99.31
0.69
99.31
96.60
92.00
87.52
84.12
5.00 %
98.49
1.51
98.49
93.19
88.66
83.93
82.10
5.50 %
95.53
95% Succ.
5.549% 		4.47
95.53
88.97
84.50
82.23
78.76
6.00 %
89.35
10.65
89.35
85.76
82.29
78.89
73.35
6.50 %
86.14
13.86
86.14
83.18
79.40
74.23
66.54
7.00 %
83.81
16.19
83.81
79.27
74.67
67.74
60.74
7.50 %
80.66
80% Succ.
7.560% 		19.34
80.66
75.24
68.12
60.74
55.32
8.00 %
75.93
24.07
75.93
68.75
61.44
54.88
48.52
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Period: Mar 1923 - Feb 2023
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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
84.60
7.00 %
91.99
90% Succ.
7.342% 		8.01
91.99
89.91
88.03
84.29
80.12
7.50 %
89.07
10.93
89.07
87.20
82.52
78.67
74.92
8.00 %
85.64
14.36
85.64
81.69
77.52
73.67
67.01
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Period: Mar 1973 - Feb 2023
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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
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Simulations are calculated with actual returns of US Small Cap 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 2023

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

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