10-year Treasury Portfolio: 4% withdrawal simulation

Last Update: 28 February 2023

You decided on a 4% withdrawal strategy and implemented the 10-year Treasury Portfolio: how likely, so far, your investment would have been enough for your retirement?.

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

Key Points

You implemented the 10-year Treasury Portfolio.

With a 4% withdrawal strategy, you would have lived on your investiment for 30 years in the 48.47% of cases, and for 50 years in the 14.59% 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Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 2.375% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.

Success Rate of a 4% Withdrawal Strategy

Let's calculate the success rate of a 4% 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  • Each month, money is withdrawn from the portfolio. The withdrawal rate is calculated based on the initial withdrawn, annualized.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. 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

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 - Feb 2023
Swipe left to see all data
4%
Withdrawal Rate
% Success
20 Years 30 Years 40 Years 50 Years 60 Years 70 Years
Success Rate (%)
95.72
48.47
28.06
14.59
11.11
8.92
Fail Rate(%)
4.28
51.53
71.94
85.41
88.89
91.08
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 0%
95.72
48.47
28.06
14.59
11.11
8.92
At least 25%
61.94
38.45
21.97
11.74
8.40
7.80
At least 50%
49.72
31.70
16.56
7.58
7.68
6.69
At least 75%
38.82
25.43
11.58
5.30
6.68
5.47
At least 100%
31.13
22.29
10.10
3.83
5.51
5.07
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Period: Mar 1923 - Feb 2023
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4%
Withdrawal Rate
% Success
20 Years 30 Years 40 Years 50 Years 60 Years 70 Years
Success Rate (%)
93.03
42.45
20.39
0.00
0.00
0.00
Fail Rate(%)
6.97
57.55
79.61
100.00
100.00
100.00
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 0%
93.03
42.45
20.39
0.00
0.00
0.00
At least 25%
59.31
34.24
14.42
0.00
0.00
0.00
At least 50%
45.79
28.30
12.90
0.00
0.00
0.00
At least 75%
37.15
22.00
8.74
0.00
0.00
0.00
At least 100%
27.99
19.74
8.04
0.00
0.00
0.00
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Period: Mar 1973 - Feb 2023
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4%
Withdrawal Rate
% Success
20 Years 30 Years
Success Rate (%)
100.00
100.00
Fail Rate(%)
0.00
0.00
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 0%
100.00
100.00
At least 25%
100.00
95.85
At least 50%
95.84
93.36
At least 75%
83.93
76.76
At least 100%
63.16
68.88
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 January 2023

4% vs Perpetual/Safe Withdrawal Rates

Let's compare a 4% 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 - 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%
Timeframes 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
4.021 4.269 4.555 5.968
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
2.691 2.950 3.164 3.887
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
1.926 2.198 2.560 3.100
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
1.612 1.678 2.178 2.718
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
1.458 1.518 1.879 2.300
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 1.425 1.657 1.980
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
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%
Timeframes 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
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Mar 1973 - Feb 2023
Swipe left to see all data
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%
Timeframes 20 Years
Worst Period (from)
0.927
Oct 2002
2.266
Oct 2002
3.606
Oct 2002
4.241
Mar 1973
4.875
Mar 1973
5.709 5.975 6.650 7.643
30 Years
Worst Period (from)
2.744
Mar 1993
3.082
Mar 1973
3.398
Mar 1973
3.714
Mar 1973
4.029
Mar 1973
4.392 4.859 5.053 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 January 2023

Related Pages

Portfolio Main Page:
10-year Treasury Portfolio

For the 10-year Treasury Portfolio, 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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