Three Funds Portfolio: 20-year retirement

Last Update: 31 October 2023

Do you have in mind a 20 years retirement, investing in the Bogleheads Three Funds Portfolio?

Worst case scenario so far, over a 20-year time horizon, you could have withdrawn 5.243% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 20 years.

With a 4% withdrawal strategy, you would have lived on your investiment for 20 years in the 100% of cases. In the 87.26% of cases, you would have preserved your initial inflation adjusted capital.

According to the historical returns and stats of the portfolio, which has been a sustainable withdrawal rate to live off your investiment?

The last 20 years of the Bogleheads Three Funds Portfolio

Over the last 20 years (last update: October 2023), the portfolio has returned 7.12% annualized, with a maximum drawdown of -44.88%.

A safe withdrawal rate would have been 7.853%.

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 portfolio didn't run out of money during retirement. The portfolio went to zero exaclty at the end of the retirement period.

Learn more about Withdrawal Rate simulation
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Timeframes ending at Oct 2023
Withdrawal Rate (%)
Investment Performances
Timeframe Period from Period to Perpetual Safe Ann.Return(%)
[ Infl.Adj. ]
Max
Drawdown(%)
20 Years 1 Nov 2003
31 Oct 2023 4.556 7.853 7.12
[ 4.43 ]
-44.88
Nov 2007 - Feb 2009
Simulations are calculated with actual returns of Bogleheads Three Funds 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 | Portfolio is rebalanced each month | Inflation is updated at October 2023

For a complete view of the portfolio and all the possible strategies, please refer to Bogleheads Three Funds Portfolio page.

Withdrawal Rates Simulation (updated at Oct 2023)

How much would it be an acceptable withdrawal rate, for the Bogleheads Three Funds Portfolio?

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: Nov 1973 - Oct 2023
Swipe left to see all data
WR (%) - Withdrawal Rate, on % Preserved Capital (Infl.Adj)
100%
Preserved
75%
Preserved
50%
Preserved
25%
Preserved
0%
Preserved
Success 100%
Worst Period (From)
1.945
Apr 2000
2.770
Apr 2000
3.594
Apr 2000
4.419
Apr 2000
5.243
Apr 2000
95%
2.961
3.690
4.411
5.161
5.912
90%
3.658
4.544
5.109
5.835
6.488
80%
4.371
5.160
5.955
6.756
7.510
50%
Median WR
5.592
6.371
7.112
7.828
8.543
Only 1 case
Best Period (From)
12.483
Aug 1982
13.185
Aug 1982
13.887
Aug 1982
14.589
Aug 1982
15.291
Aug 1982
Simulations are calculated with actual returns of Bogleheads Three Funds 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 | Portfolio is rebalanced each month | Inflation is updated at October 2023

Withdrawals and Success Rate

If you had implemented a specific Withdrawal Strategy with the Bogleheads Three Funds Portfolio, 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: Nov 1973 - Oct 2023
Swipe left to see all data
Withdrawal
Rate
% Success over 20 Years
% Fail
% Success over 20 Years - on % Preserved Capital (Infl.Adj)
At least 0%
Capital Preserved
Percentile No Capital
Preserved
25%
Preserved
50%
Preserved
75%
Preserved
100%
Preserved
2.00 %
100.00
0.00
100.00
100.00
100.00
99.72
2.50 %
100.00
0.00
100.00
100.00
100.00
99.45
3.00 %
100.00
0.00
100.00
100.00
99.72
94.74
3.50 %
100.00
0.00
100.00
100.00
97.78
91.41
4.00 %
100.00
0.00
100.00
98.89
92.52
87.26
4.50 %
100.00
0.00
99.72
94.18
90.03
77.56
5.00 %
100.00
100% Succ.
5.243%
0.00
96.95
90.58
84.21
67.87
5.50 %
98.34
95% Succ.
5.912%
1.66
91.97
86.98
72.02
52.63
6.00 %
93.63
90% Succ.
6.488%
6.37
88.64
78.39
62.05
43.77
6.50 %
89.75
10.25
84.21
67.87
46.81
36.57
7.00 %
85.04
14.96
75.35
53.19
38.50
31.86
7.50 %
80.06
80% Succ.
7.510%
19.94
62.88
40.44
31.58
27.70
8.00 %
69.81
30.19
45.98
32.13
26.87
24.38
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Simulations are calculated with actual returns of Bogleheads Three Funds 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 | Portfolio is rebalanced each month | Inflation is updated at October 2023

Related Pages

Portfolio Main Page:
Bogleheads Three Funds Portfolio

For the Bogleheads Three Funds Portfolio, we have prepared a report for each available timeframe:
20-Year    30-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