US Small Cap Value: a good asset for your retirement?

Last Update: 31 January 2024

US Small Cap Value is an asset class belonging to Stocks category.

You can invest in this asset class, let it passively follow the market trend, and in the meantime you can periodically withdraw a portion of it for your retirement.

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.118% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.

Considering the last 30-year (last update: January 2024), a safe withdrawal rate would have been 9.182%.

In this post, we will find out the most affordable withdrawal strategies. All calculations are made on actual historical series(*).

(*)1871-1926: data source extended with US Total Stock Market returns.

US Small Cap Value asset class

Over the last 30 years (last update: January 2024), the asset class has returned 10.06% annualized, with a maximum drawdown of -54.13%.

Let's consider different timeframes, all ending at January 2024: which Withdrawal Rates could you have applied without running out of money in your retirement?

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 Jan 2024
Withdrawal Rate (%)
Investment Performances
Timeframe Period from Period to Perpetual Safe Ann.Return(%)
[ Infl.Adj. ]
Max
Drawdown(%)
20 Years 1 Feb 2004
31 Jan 2024 5.456 8.098 8.49
[ 5.76 ]
-54.13
Jun 2007 - Feb 2009
30 Years 1 Feb 1994
31 Jan 2024 8.091 9.182 10.06
[ 7.36 ]
-54.13
Jun 2007 - Feb 2009
40 Years 1 Feb 1984
31 Jan 2024 10.062 10.454 11.60
[ 8.55 ]
-54.13
Jun 2007 - Feb 2009
50 Years 1 Feb 1974
31 Jan 2024 11.332 11.432 14.18
[ 9.94 ]
-54.13
Jun 2007 - Feb 2009
60 Years 1 Feb 1964
31 Jan 2024 9.232 9.278 13.53
[ 9.26 ]
-54.13
Jun 2007 - Feb 2009
70 Years 1 Feb 1954
31 Jan 2024 14.051 14.068 14.02
[ 10.12 ]
-54.13
Jun 2007 - Feb 2009
Simulations are calculated with actual returns of US Small Cap Value 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 2024

Withdrawal Rates Simulation (updated at Jan 2024)

During your retirement, tipically you want to divest periodically some amount of money from your invested capital, without running out of money over a long period.

How much would it be an acceptable withdrawal rate, for the US Small Cap Value asset class?

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. In this website, you can find PWRs with 100% Capital Protection, or less.

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. In this website, you can find SWRs with 100% Success rate, or less.

Learn more about Withdrawal Rate simulation
Data Sources and Credits

Analyzing the available data source, several N-years timeframes have been considered to calculate the withdrawal rates and their success percentage.

For instance, given a 20 years timeframe, the algorithm will cover each 20 year timeframe starting at every possible month in the given period between the start and end month (Jan 2024).

Period: Jan 1871 - Jan 2024
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 20 Years
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 5.950 7.577 9.949
30 Years
Worst Period (from)
0.000
Jun 1902
0.620
Jun 1902
1.970
Jun 1902
3.044
Sep 1929
3.118
Sep 1929
4.503 4.922 6.176 8.843
40 Years
Worst Period (from)
2.229
Jun 1892
2.958
Jun 1892
3.010
Sep 1929
3.034
Sep 1929
3.058
Sep 1929
4.129 4.509 5.460 8.039
50 Years
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 4.296 5.110 7.431
60 Years
Worst Period (from)
3.004
Sep 1929
3.007
Sep 1929
3.011
Sep 1929
3.014
Sep 1929
3.017
Sep 1929
3.940 4.219 4.924 7.150
70 Years
Worst Period (from)
3.009
Sep 1929
3.011
Sep 1929
3.012
Sep 1929
3.013
Sep 1929
3.014
Sep 1929
3.890 4.119 4.767 6.394
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Feb 1924 - Jan 2024
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 20 Years
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 7.342 8.463 11.262
30 Years
Worst Period (from)
2.822
Sep 1929
2.896
Sep 1929
2.970
Sep 1929
3.044
Sep 1929
3.118
Sep 1929
5.427 6.590 8.009 10.615
40 Years
Worst Period (from)
2.963
Sep 1929
2.986
Sep 1929
3.010
Sep 1929
3.034
Sep 1929
3.058
Sep 1929
5.096 6.187 7.457 10.352
50 Years
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 5.753 7.077 9.513
60 Years
Worst Period (from)
3.004
Sep 1929
3.007
Sep 1929
3.011
Sep 1929
3.014
Sep 1929
3.017
Sep 1929
4.518 5.764 7.234 10.202
70 Years
Worst Period (from)
3.009
Sep 1929
3.011
Sep 1929
3.012
Sep 1929
3.013
Sep 1929
3.014
Sep 1929
4.272 5.074 6.621 10.538
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Feb 1974 - Jan 2024
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 20 Years
Worst Period (from)
5.094
May 2002
5.662
May 2002
6.173
May 1998
6.676
May 1998
7.179
May 1998
8.102 8.792 9.693 11.965
30 Years
Worst Period (from)
7.450
Sep 1987
7.632
Sep 1987
7.814
Sep 1987
7.996
Sep 1987
8.178
Sep 1987
8.860 9.333 9.993 11.959
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Simulations are calculated with actual returns of US Small Cap Value 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 2024

Withdrawals and Success Rate

If you had implemented a specific Withdrawal Strategy with the US Small Cap Value asset class, 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 the past timeframes available in the data source. To focus on a specific withdrawal rate, click on the links in the table.

Period: Jan 1871 - Jan 2024
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Withdrawal
Rate
20 Years
30 Years
40 Years
50 Years
60 Years
70 Years
% Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile
2.00 %
100.00
100.00
100.00
100.00
100.00
100.00
2.50 %
100.00
100.00
100.00
100.00
100.00
100.00
3.00 %
100.00
100% Succ.
3.380%
100.00
100% Succ.
3.118%
100.00
100% Succ.
3.058%
100.00
100% Succ.
3.027%
100.00
100% Succ.
3.017%
100.00
100% Succ.
3.014%
3.50 %
99.94
99.80
99.71
99.68
95% Succ.
3.998%
99.55
95% Succ.
3.940%
99.50
95% Succ.
3.890%
4.00 %
99.69
99.19
97.05
95% Succ.
4.129%
94.99
90% Succ.
4.296%
94.19
90% Succ.
4.219%
92.99
90% Succ.
4.119%
4.50 %
99.31
95.06
95% Succ.
4.503%
90.21
90% Succ.
4.509%
88.05
86.49
80% Succ.
4.924%
84.77
80% Succ.
4.767%
5.00 %
98.50
88.97
85.27
80% Succ.
5.460%
81.74
80% Succ.
5.110%
78.62
75.55
5.50 %
95.56
95% Succ.
5.549%
85.52
79.16
72.70
69.05
64.73
6.00 %
89.42
81.33
80% Succ.
6.176%
72.83
65.59
61.09
55.41
50% Succ.
6.394%
6.50 %
86.23
77.00
65.98
58.72
55.01
49.10
7.00 %
83.92
71.04
60.38
54.28
50% Succ.
7.431%
51.16
50% Succ.
7.150%
45.19
7.50 %
80.79
80% Succ.
7.577%
63.80
55.45
49.52
47.85
40.48
8.00 %
76.10
58.59
50.74
42.73
40.79
32.16
Period: Feb 1924 - Jan 2024
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Withdrawal
Rate
20 Years
30 Years
40 Years
50 Years
60 Years
70 Years
% Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile
2.00 %
100.00
100.00
100.00
100.00
100.00
100.00
2.50 %
100.00
100.00
100.00
100.00
100.00
100.00
3.00 %
100.00
100% Succ.
3.380%
100.00
100% Succ.
3.118%
100.00
100% Succ.
3.058%
100.00
100% Succ.
3.027%
100.00
100% Succ.
3.017%
100.00
100% Succ.
3.014%
3.50 %
99.90
99.64
99.45
99.33
99.17
98.89
4.00 %
99.48
98.69
98.47
98.17
97.71
96.95
95% Succ.
4.272%
4.50 %
98.86
97.50
96.81
96.17
95% Succ.
4.827%
95.22
95% Succ.
4.518%
93.63
5.00 %
97.71
96.31
95% Succ.
5.427%
95.28
95% Succ.
5.096%
94.01
92.72
90.30
90% Succ.
5.074%
5.50 %
96.46
95% Succ.
5.972%
94.53
93.07
91.35
90% Succ.
5.753%
90.64
90% Succ.
5.764%
87.26
6.00 %
94.90
92.51
91.12
90% Succ.
6.187%
88.85
89.19
85.32
6.50 %
93.65
90.49
90% Succ.
6.590%
87.52
84.86
85.86
81.16
80% Succ.
6.621%
7.00 %
91.99
90% Succ.
7.342%
87.51
84.60
80% Succ.
7.457%
80.70
80% Succ.
7.077%
82.33
80% Succ.
7.234%
76.45
7.50 %
89.07
83.83
79.75
74.88
79.00
71.75
8.00 %
85.64
80.02
74.90
68.55
76.51
68.70
Period: Feb 1974 - Jan 2024
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Withdrawal
Rate
20 Years
30 Years
% Success Percentile % Success Percentile
2.00 %
100.00
100.00
2.50 %
100.00
100.00
3.00 %
100.00
100.00
3.50 %
100.00
100.00
4.00 %
100.00
100.00
4.50 %
100.00
100.00
5.00 %
100.00
100.00
5.50 %
100.00
100.00
6.00 %
100.00
100.00
6.50 %
100.00
100.00
7.00 %
100.00
100% Succ.
7.179%
100.00
7.50 %
99.17
100.00
8.00 %
96.95
100.00
Simulations are calculated with actual returns of US Small Cap Value 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 2024

Related Pages

Asset Class Main Page:
US Small Cap Value Asset Class

For the US Small Cap Value 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