Three Funds Portfolio: 20-year retirement

Last Update: 28 February 2023

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

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

Key Points

Worst case scenario so far, over a 20-year time horizon, you could have withdrawn 5.243% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 20 years.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 86.43% of cases, you would have preserved your initial inflation adjusted capital.

The last 20 years of the Bogleheads Three Funds Portfolio

Over the last 20 years (last update: February 2023), the portfolio has returned 8.27% annualized, with a maximum drawdown of -44.88%.

A safe withdrawal rate would have been 9.456%.

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

Swipe left to see all data

Timeframes ending at Feb 2023			Withdrawal Rate (%)		Investment Performances
Timeframe	Period from	Period to	Perpetual	Safe	Ann.Return(%) [ Infl.Adj. ]	Max Drawdown(%)
20 Years	1 Mar 2003	28 Feb 2023	6.300	9.456	8.27 [ 5.64 ]	-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 January 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 Feb 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: Mar 1973 - 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)	1.945 Apr 2000	2.770 Apr 2000	3.594 Apr 2000	4.419 Apr 2000	5.243 Apr 2000	5.877 95% Succ.	6.170 90% Succ.	7.325 80% Succ.	8.537 50% Succ.
Median	5.548	6.343	7.073	7.807	8.537
Average	6.146	6.813	7.479	8.146	8.813
Maximum Best Period (from)	12.483 Aug 1982	13.185 Aug 1982	13.887 Aug 1982	14.589 Aug 1982	15.291 Aug 1982

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Key Withdrawal Rates (%)		Success Rate
Key Withdrawal Rates (%)		100%	95%	90%	80%	50%
Preserved Capital	100%	1.945	2.961	3.644	4.276	5.548
	75%	2.770	3.690	4.296	5.111	6.343
	50%	3.594	4.411	4.971	5.910	7.073
	25%	4.419	5.148	5.541	6.626	7.807
	0%	5.243	5.877	6.170	7.325	8.537

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: Mar 1973 - Feb 2023

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Withdrawal Rate	20 Years		% Fail	% Success over 20 Years - on % Preserved Capital
Withdrawal Rate	% 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	99.72
2.50 %	100.00		0.00	100.00	100.00	100.00	100.00	99.45
3.00 %	100.00		0.00	100.00	100.00	100.00	99.72	94.74
3.50 %	100.00		0.00	100.00	100.00	100.00	97.78	91.14
4.00 %	100.00		0.00	100.00	100.00	98.89	92.24	86.43
4.50 %	100.00		0.00	100.00	99.72	94.18	89.20	75.35
5.00 %	100.00	100% Succ. 5.243%	0.00	100.00	96.95	89.47	81.99	65.93
5.50 %	98.34	95% Succ. 5.877%	1.66	98.34	90.86	84.76	70.08	52.08
6.00 %	92.52	90% Succ. 6.170%	7.48	92.52	86.43	76.18	60.66	43.49
6.50 %	87.53		12.47	87.53	81.99	65.93	46.26	36.57
7.00 %	82.83	80% Succ. 7.325%	17.17	82.83	73.13	52.63	38.23	31.86
7.50 %	77.84		22.16	77.84	61.50	40.17	31.58	27.70
8.00 %	67.87		32.13	67.87	45.43	32.13	26.87	24.38

Legend: Min% of Protected Capital

Min 0%

Min 25%

Min 50%

Min 75%

Min 100%

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

The last 20 years of the Bogleheads Three Funds Portfolio

Withdrawal Rates Simulation (updated at Feb 2023)

Withdrawals and Success Rate

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