US Small Cap: 50-year retirement

Last Update: 28 February 2023

Do you have in mind a 50 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Worst case scenario so far, over a 50-year time horizon, you could have withdrawn 3.027% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 50 years.

Considering the last 50 years (last update: February 2023), a safe withdrawal rate would have been 8.83%.

The last 50 years of the US Small Cap asset class

Over the last 50 years (last update: February 2023), the asset class has returned 14.03% 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(%)
50 Years 1 Mar 1973
 28 Feb 2023 8.743 8.830 14.03
[ 9.69 ] 		-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 50-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) 		2.972
Sep 1929 		2.985
Sep 1929 		2.999
Sep 1929 		3.013
Sep 1929 		3.027
Sep 1929 		3.998
95% Succ. 		4.292
90% Succ. 		5.100
80% Succ. 		7.373
50% Succ.
Median 7.211
 7.253
 7.343
 7.353
 7.373
Average 7.724
 7.768
 7.813
 7.857
 7.902
Maximum
Best Period (from) 		26.159
Jul 1932 		26.176
Jul 1932 		26.192
Jul 1932 		26.209
Jul 1932 		26.225
Jul 1932
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Key
Withdrawal
Rates (%) 		Success Rate
100% 95% 90% 80% 50%
Preserved Capital 100% 2.972
 3.861
 4.161
 4.856
 7.211
75% 2.985
 3.911
 4.207
 4.924
 7.253
50% 2.999
 3.940
 4.249
 4.983
 7.343
25% 3.013
 3.972
 4.270
 5.040
 7.353
0% 3.027
 3.998
 4.292
 5.100
 7.373
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) 		2.972
Sep 1929 		2.985
Sep 1929 		2.999
Sep 1929 		3.013
Sep 1929 		3.027
Sep 1929 		4.827
95% Succ. 		5.753
90% Succ. 		7.077
80% Succ. 		9.259
50% Succ.
Median 9.223
 9.232
 9.241
 9.250
 9.259
Average 9.718
 9.733
 9.749
 9.765
 9.780
Maximum
Best Period (from) 		26.159
Jul 1932 		26.176
Jul 1932 		26.192
Jul 1932 		26.209
Jul 1932 		26.225
Jul 1932
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Key
Withdrawal
Rates (%) 		Success Rate
100% 95% 90% 80% 50%
Preserved Capital 100% 2.972
 4.752
 5.681
 6.993
 9.223
75% 2.985
 4.771
 5.699
 7.014
 9.232
50% 2.999
 4.790
 5.717
 7.033
 9.241
25% 3.013
 4.808
 5.735
 7.056
 9.250
0% 3.027
 4.827
 5.753
 7.077
 9.259
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 50 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 50-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
50 Years
% Fail
% Success over 50 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
100% Succ.
3.027% 		0.00
100.00
100.00
99.92
99.92
99.92
3.50 %
99.67
95% Succ.
3.998% 		0.33
99.67
99.59
99.43
99.27
99.19
4.00 %
94.95
90% Succ.
4.292% 		5.05
94.95
94.54
93.97
93.32
92.42
4.50 %
87.94
12.06
87.94
87.69
87.04
86.23
85.74
5.00 %
81.58
80% Succ.
5.100% 		18.42
81.58
80.68
79.63
78.00
76.53
5.50 %
72.45
27.55
72.45
71.31
70.66
68.54
66.75
6.00 %
65.28
34.72
65.28
64.06
62.43
60.80
60.31
6.50 %
58.35
41.65
58.35
57.21
56.81
56.32
55.66
7.00 %
53.87
50% Succ.
7.373% 		46.13
53.87
53.30
53.06
52.65
52.40
7.50 %
49.06
50.94
49.06
48.98
48.33
47.51
46.54
8.00 %
42.22
57.78
42.22
41.40
40.18
38.88
38.55
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Period: Mar 1923 - Feb 2023
Swipe left to see all data
Withdrawal
Rate
50 Years
% Fail
% Success over 50 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
100% Succ.
3.027% 		0.00
100.00
100.00
99.83
99.83
99.83
3.50 %
99.33
0.67
99.33
99.33
99.33
99.17
99.17
4.00 %
98.17
1.83
98.17
98.17
98.17
98.17
98.17
4.50 %
96.17
95% Succ.
4.827% 		3.83
96.17
96.17
96.01
95.84
95.84
5.00 %
94.01
5.99
94.01
94.01
93.84
93.68
93.68
5.50 %
91.35
90% Succ.
5.753% 		8.65
91.35
91.18
90.85
90.52
90.52
6.00 %
88.85
11.15
88.85
88.85
88.69
88.52
88.19
6.50 %
84.86
15.14
84.86
84.69
84.36
84.36
84.03
7.00 %
80.70
80% Succ.
7.077% 		19.30
80.70
80.70
80.53
80.20
79.87
7.50 %
74.71
25.29
74.71
74.54
74.38
74.04
73.71
8.00 %
68.05
31.95
68.05
68.05
67.89
67.89
67.89
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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