10-year Treasury Portfolio: 3.5% withdrawal simulation

Last Update: 30 November 2024

You decided on a 3.5% withdrawal strategy and implemented the 10-year Treasury Portfolio: how likely, so far, your investment would have been enough for your retirement?.

With a 3.5% withdrawal strategy, you would have lived on your investiment for 30 years in the 62.43% of cases, and for 50 years in the 20.35% of cases.

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 2.375% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.

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

Success Rate of a 3.5% Withdrawal Strategy

Let's calculate the success rate of a 3.5% Withdrawal Strategy, on the 10-year Treasury Portfolio. 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  • Each month, money is withdrawn from the portfolio. The withdrawal rate is calculated based on the initial withdrawn, annualized.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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3.5%
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
100.00
62.43
39.55
20.35
15.69
15.18
10.92
Fail Rate(%)
0.00
0.00
37.57
60.45
79.65
84.31
84.82
89.08
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 25%
100.00
75.56
46.37
30.04
16.03
13.74
11.41
9.91
At least 50%
86.57
53.17
37.70
23.32
13.38
12.50
9.23
8.45
At least 75%
56.25
44.47
30.04
18.13
9.29
10.11
8.53
6.98
At least 100%
43.63
34.83
25.94
15.42
6.57
8.24
7.44
5.86
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Period: Dec 1924 - Nov 2024
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3.5%
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
100.00
54.58
32.18
4.16
0.00
0.00
0.00
Fail Rate(%)
0.00
0.00
45.42
67.82
95.84
100.00
100.00
100.00
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 25%
100.00
74.51
43.52
22.61
1.66
0.00
0.00
0.00
At least 50%
87.33
48.49
34.13
18.31
0.83
0.00
0.00
0.00
At least 75%
52.64
39.96
28.42
17.75
0.00
0.00
0.00
0.00
At least 100%
37.28
30.70
24.97
16.64
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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3.5%
Withdrawal Rate
% Success
10 Years 20 Years 30 Years
Success Rate (%)
At least 0% Preserved Capital
100.00
100.00
100.00
Fail Rate(%)
0.00
0.00
0.00
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 25%
100.00
100.00
100.00
At least 50%
100.00
97.78
100.00
At least 75%
90.02
91.14
95.85
At least 100%
65.49
75.07
85.89
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Simulations are calculated with actual returns of 10-year Treasury Portfolio | 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

3.5% vs Perpetual/Safe Withdrawal Rates

Let's compare a 3.5% 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 review 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
Jun 1897 		0.000
May 1908 		0.853
Oct 1971 		4.621
Oct 1971 		7.493
Sep 1915 		8.069 8.573 9.462 11.182
20 Years
Worst Period (from) 		0.000
Feb 1897 		0.000
Feb 1898 		0.289
Jul 1900 		2.260
Feb 1941 		3.585
May 1941 		4.023 4.277 4.561 6.005
30 Years
Worst Period (from) 		0.000
Jun 1889 		0.000
Apr 1939 		0.606
May 1940 		1.523
Nov 1940 		2.375
Feb 1941 		2.692 2.952 3.173 3.928
40 Years
Worst Period (from) 		0.000
Jan 1933 		0.000
May 1938 		0.000
Apr 1940 		0.748
Sep 1941 		1.737
May 1941 		1.928 2.205 2.567 3.142
50 Years
Worst Period (from) 		0.000
Feb 1930 		0.000
May 1931 		0.507
Oct 1931 		1.094
Feb 1941 		1.405
Feb 1941 		1.614 1.683 2.181 2.727
60 Years
Worst Period (from) 		0.386
Aug 1897 		0.767
Aug 1897 		0.963
Dec 1940 		1.125
Feb 1941 		1.286
Feb 1941 		1.459 1.520 1.882 2.312
70 Years
Worst Period (from) 		0.000
Mar 1911 		0.293
Oct 1911 		0.768
May 1911 		1.119
Feb 1941 		1.222
Feb 1941 		1.368 1.429 1.660 2.006
80 Years
Worst Period (from) 		0.000
Jan 1901 		0.179
Oct 1901 		0.606
Oct 1901 		1.019
May 1901 		1.180
Feb 1941 		1.297 1.366 1.472 1.870
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
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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
Aug 1936 		0.000
Aug 1938 		0.853
Oct 1971 		4.621
Oct 1971 		7.643
Feb 1946 		8.227 8.646 9.381 10.812
20 Years
Worst Period (from) 		0.000
Apr 1932 		0.000
Dec 1936 		0.842
Aug 1939 		2.260
Feb 1941 		3.585
May 1941 		3.909 4.211 4.577 5.481
30 Years
Worst Period (from) 		0.000
Jul 1932 		0.000
Apr 1939 		0.606
May 1940 		1.523
Nov 1940 		2.375
Feb 1941 		2.590 2.708 3.119 3.628
40 Years
Worst Period (from) 		0.000
Jan 1933 		0.000
May 1938 		0.000
Apr 1940 		0.748
Sep 1941 		1.737
May 1941 		1.859 1.931 2.212 2.970
50 Years
Worst Period (from) 		0.000
Feb 1930 		0.000
May 1931 		0.507
Oct 1931 		1.094
Feb 1941 		1.405
Feb 1941 		1.499 1.610 1.677 2.508
60 Years
Worst Period (from) 		0.596
Dec 1934 		0.795
Aug 1939 		0.963
Dec 1940 		1.125
Feb 1941 		1.286
Feb 1941 		1.350 1.441 1.506 2.090
70 Years
Worst Period (from) 		0.809
Apr 1941 		0.914
Feb 1941 		1.016
Feb 1941 		1.119
Feb 1941 		1.222
Feb 1941 		1.268 1.323 1.402 1.733
80 Years
Worst Period (from) 		0.858
May 1941 		0.940
May 1941 		1.022
May 1941 		1.103
Feb 1941 		1.180
Feb 1941 		1.209 1.232 1.318 1.402
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
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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
Apr 2012 		0.575
Nov 2013 		3.741
Dec 2014 		6.690
Dec 2014 		8.494
Jan 1977 		9.122 9.991 10.812 12.280
20 Years
Worst Period (from) 		0.494
Nov 2003 		1.905
Apr 2004 		3.296
Apr 2004 		4.687
Apr 2004 		5.643
Jan 1977 		5.985 6.141 6.650 7.643
30 Years
Worst Period (from) 		2.194
Nov 1993 		2.980
Nov 1993 		3.765
Nov 1993 		4.372
Jan 1977 		4.719
Jan 1977 		4.984 5.042 5.491 6.451
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Simulations are calculated with actual returns of 10-year Treasury Portfolio | 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

Portfolio Main Page:
10-year Treasury Portfolio

For the 10-year Treasury Portfolio, 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%   

Website Homepage:
BestRetirementPortfolio.com