Last Update: 31 October 2024
The Golden Butterfly Portfolio invests in 5 asset classes and is allocated for 40% on Stocks.
In the period Jan 1871 - Oct 2024, the portfolio granted a 6.96% annualized return, with a -50.14% maximum drawdown.
Key Points
Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.589% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.
With a 4% withdrawal strategy, you would have lived on your investiment for 30 years in the 94.75% of cases, and for 50 years in the 66.96% of cases .
In this post we will find out the most affordable withdrawal strategies for the Golden Butterfly Portfolio. All calculations are made on actual historical series.
You can implement the portfolio, let it passively follow the market trend, and in the meantime you can periodically withdraw a portion of it for your retirement.
The Golden Butterfly Portfolio
The Golden Butterfly Portfolio contains 40% Stocks, 40% Bonds, 20% Commodities.
| Weight | Asset Class | Category |
|---|---|---|
| 20.00 % | Total US Stock Market | Stocks |
| 20.00 % | US Small Cap Value | Stocks |
| 20.00 % | US Short Term (1-3y) Treasuries | Fixed Income |
| 20.00 % | US Long Term (20y+) Treasuries | Fixed Income |
| 20.00 % | Gold | Commodities |
US Small Cap Value: 1871-1926: data source extended with US Total Stock Market returns.
Over the last 30 years (last update: October 2024), the portfolio has returned 7.95% annualized, with a maximum drawdown of -17.95%.
7.168% has been a safe withdrawal rate.
Let's consider different timeframes, all ending at October 2024: which Withdrawal Rates could you have applied without running out of money in your retirement?
Swipe left to see all data
Timeframes ending at Oct 2024 |
Withdrawal Rate (%) |
Investment Performances |
||||
|---|---|---|---|---|---|---|
| Timeframe | Period from | Period to | Perpetual | Safe | Ann.Return(%) [ Infl.Adj. ] |
Max Drawdown(%) |
| 10 Years |
1 Nov 2014 |
31 Oct 2024 | 3.606 | 11.980 |
6.64 [ 3.65 ] |
-17.95 Jan 2022 - Sep 2022 |
| 20 Years |
1 Nov 2004 |
31 Oct 2024 | 5.009 | 8.190 |
7.51 [ 4.84 ] |
-17.95 Jan 2022 - Sep 2022 |
| 30 Years |
1 Nov 1994 |
31 Oct 2024 | 5.641 | 7.168 |
7.95 [ 5.29 ] |
-17.95 Jan 2022 - Sep 2022 |
| 40 Years |
1 Nov 1984 |
31 Oct 2024 | 6.520 | 7.310 |
8.66 [ 5.72 ] |
-17.95 Jan 2022 - Sep 2022 |
| 50 Years |
1 Nov 1974 |
31 Oct 2024 | 6.444 | 6.841 |
9.79 [ 5.86 ] |
-17.95 Jan 2022 - Sep 2022 |
| 60 Years |
1 Nov 1964 |
31 Oct 2024 | 4.513 | 4.744 |
9.31 [ 5.17 ] |
-17.95 Jan 2022 - Sep 2022 |
| 70 Years |
1 Nov 1954 |
31 Oct 2024 | 4.731 | 4.874 |
8.95 [ 5.18 ] |
-17.95 Jan 2022 - Sep 2022 |
| 80 Years |
1 Nov 1944 |
31 Oct 2024 | 3.941 | 4.030 |
8.73 [ 4.89 ] |
-17.95 Jan 2022 - Sep 2022 |
Simulations are calculated with actual returns of Golden Butterfly 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 2024
Withdrawal Rates Simulation (updated at Oct 2024)
During your retirement, tipically you want to divest periodically some amount of money from your portfolio, without running out of money over a long period.
Based on how long your retirement is, what would it be an acceptable withdrawal rate, for the Golden Butterfly Portfolio?
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):
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
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 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
In the table below, we analyze different key withdrawal rates, based on the length of retirement. To focus on a specific timeframe for this portfolio, click on the links in the table.
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 |
10 Years Worst Period (from) |
0.000 Jan 1908 |
0.000 Feb 1909 |
1.676 Jul 1911 |
4.831 Jul 1911 |
7.667 Dec 1915 |
9.252 | 10.321 | 11.241 | 12.553 | |
|
20 Years Worst Period (from) |
0.000 Sep 1898 |
0.192 Jul 1901 |
1.780 Jul 1901 |
3.369 Jul 1901 |
4.543 Jun 1911 |
5.095 | 5.398 | 6.417 | 7.710 | ||
|
30 Years Worst Period (from) |
0.905 Jul 1890 |
1.720 Jun 1902 |
2.429 Jun 1902 |
3.091 Jul 1901 |
3.589 Jul 1901 |
3.983 | 4.222 | 4.615 | 5.978 | ||
|
40 Years Worst Period (from) |
1.848 Jun 1892 |
2.321 Jun 1892 |
2.662 Jul 1901 |
2.908 Jul 1901 |
3.153 Jul 1901 |
3.512 | 3.663 | 3.916 | 5.201 | ||
|
50 Years Worst Period (from) |
2.158 Jul 1901 |
2.343 Jul 1901 |
2.527 Jul 1901 |
2.712 Jul 1901 |
2.897 Jul 1901 |
3.211 | 3.358 | 3.583 | 4.758 | ||
|
60 Years Worst Period (from) |
2.340 Jul 1901 |
2.441 Jul 1901 |
2.541 Jul 1901 |
2.642 Jul 1901 |
2.742 Jul 1901 |
3.021 | 3.176 | 3.369 | 4.388 | ||
|
70 Years Worst Period (from) |
2.357 Jul 1901 |
2.431 Jul 1901 |
2.505 Jul 1901 |
2.579 Jul 1901 |
2.653 Jul 1901 |
2.895 | 3.056 | 3.226 | 4.058 | ||
|
80 Years Worst Period (from) |
2.409 Jul 1901 |
2.455 Jul 1901 |
2.501 Jul 1901 |
2.547 Jul 1901 |
2.593 Jul 1901 |
2.806 | 2.967 | 3.115 | 3.828 | ||
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
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 |
10 Years Worst Period (from) |
0.233 Dec 1938 |
2.602 Dec 1936 |
4.920 Dec 1936 |
6.927 Feb 1946 |
8.754 Feb 1946 |
10.365 | 10.963 | 11.625 | 12.643 | |
|
20 Years Worst Period (from) |
1.758 Mar 1937 |
2.625 Mar 1937 |
3.492 Mar 1937 |
4.359 Mar 1937 |
5.216 Feb 1937 |
6.018 | 6.478 | 6.855 | 7.876 | ||
|
30 Years Worst Period (from) |
2.344 Dec 1936 |
2.790 Dec 1936 |
3.236 Dec 1936 |
3.674 Feb 1937 |
4.095 Feb 1937 |
4.758 | 5.060 | 5.499 | 6.174 | ||
|
40 Years Worst Period (from) |
2.458 Feb 1937 |
2.734 Feb 1937 |
3.009 Feb 1937 |
3.285 Feb 1937 |
3.560 Feb 1937 |
4.077 | 4.326 | 4.826 | 5.356 | ||
|
50 Years Worst Period (from) |
2.847 Feb 1937 |
2.956 Feb 1937 |
3.066 Feb 1937 |
3.176 Feb 1937 |
3.286 Feb 1937 |
3.747 | 3.947 | 4.299 | 4.973 | ||
|
60 Years Worst Period (from) |
2.908 Feb 1937 |
2.973 Feb 1937 |
3.038 Feb 1937 |
3.103 Feb 1937 |
3.168 Feb 1937 |
3.574 | 3.740 | 4.048 | 4.751 | ||
|
70 Years Worst Period (from) |
2.963 Feb 1937 |
2.999 Feb 1937 |
3.034 Feb 1937 |
3.069 Feb 1937 |
3.105 Feb 1937 |
3.429 | 3.597 | 3.792 | 4.470 | ||
|
80 Years Worst Period (from) |
2.983 Feb 1937 |
3.005 Feb 1937 |
3.026 Feb 1937 |
3.048 Feb 1937 |
3.069 Feb 1937 |
3.308 | 3.533 | 3.700 | 4.161 | ||
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
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 |
10 Years Worst Period (from) |
2.208 Nov 2013 |
4.684 Nov 2013 |
7.159 Nov 2013 |
9.603 Oct 2012 |
11.495 Aug 1987 |
12.042 | 12.206 | 12.461 | 13.077 | |
|
20 Years Worst Period (from) |
4.552 May 1998 |
5.254 May 1998 |
5.957 May 1998 |
6.660 May 1998 |
7.357 Aug 1987 |
7.658 | 7.839 | 8.024 | 8.567 | ||
|
30 Years Worst Period (from) |
4.789 Aug 1987 |
5.114 Aug 1987 |
5.438 Aug 1987 |
5.763 Aug 1987 |
6.088 Aug 1987 |
6.388 | 6.581 | 6.762 | 7.357 | ||
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Simulations are calculated with actual returns of Golden Butterfly 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 2024
Withdrawals and Success Rate
If you had implemented a specific Withdrawal Strategy with the Golden Butterfly Portfolio, 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.
Swipe left to see all data
| Withdrawal Rate |
10 Years
|
10 Years
|
20 Years
|
20 Years
|
30 Years
|
30 Years
|
40 Years
|
40 Years
|
50 Years
|
50 Years
|
60 Years
|
60 Years
|
70 Years
|
70 Years
|
80 Years
|
80 Years
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| % Success | Percentile | % Success | Percentile | % 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
|
100.00
|
100.00
|
||||||||
| 2.50 % |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
100% Succ. 2.897% |
100.00
|
100% Succ. 2.742% |
100.00
|
100% Succ. 2.653% |
100.00
|
100% Succ. 2.593% |
||||
| 3.00 % |
100.00
|
100.00
|
100.00
|
100.00
|
100% Succ. 3.153% |
99.52
|
95% Succ. 3.211% |
95.39
|
95% Succ. 3.021% |
92.45
|
90% Succ. 3.056% |
88.05
|
80% Succ. 3.115% |
|||
| 3.50 % |
100.00
|
100.00
|
100.00
|
100% Succ. 3.589% |
95.10
|
95% Succ. 3.512% |
84.52
|
80% Succ. 3.583% |
74.62
|
67.43
|
59.98
|
50% Succ. 3.828% |
||||
| 4.00 % |
100.00
|
100.00
|
94.75
|
90% Succ. 4.222% |
78.13
|
66.96
|
58.56
|
50% Succ. 4.388% |
51.64
|
50% Succ. 4.058% |
45.21
|
|||||
| 4.50 % |
100.00
|
100.00
|
100% Succ. 4.543% |
82.58
|
80% Succ. 4.615% |
66.72
|
56.54
|
50% Succ. 4.758% |
47.29
|
37.04
|
30.33
|
|||||
| 5.00 % |
100.00
|
96.08
|
95% Succ. 5.095% |
75.12
|
57.50
|
50% Succ. 5.201% |
38.17
|
26.97
|
26.02
|
23.00
|
||||||
| 5.50 % |
100.00
|
88.74
|
65.30
|
50% Succ. 5.978% |
38.41
|
21.73
|
16.86
|
15.19
|
14.77
|
|||||||
| 6.00 % |
100.00
|
84.26
|
80% Succ. 6.417% |
49.29
|
26.85
|
12.91
|
7.90
|
6.65
|
4.85
|
|||||||
| 6.50 % |
100.00
|
78.66
|
37.12
|
20.19
|
6.17
|
2.57
|
1.99
|
2.25
|
||||||||
| 7.00 % |
100.00
|
67.08
|
26.23
|
12.36
|
1.84
|
0.98
|
0.70
|
0.34
|
||||||||
| 7.50 % |
100.00
|
100% Succ. 7.667% |
55.26
|
50% Succ. 7.710% |
16.75
|
4.54
|
0.72
|
0.00
|
0.00
|
0.00
|
||||||
| 8.00 % |
99.31
|
41.57
|
8.14
|
1.32
|
0.00
|
0.00
|
0.00
|
0.00
|
Swipe left to see all data
| Withdrawal Rate |
10 Years
|
10 Years
|
20 Years
|
20 Years
|
30 Years
|
30 Years
|
40 Years
|
40 Years
|
50 Years
|
50 Years
|
60 Years
|
60 Years
|
70 Years
|
70 Years
|
80 Years
|
80 Years
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| % Success | Percentile | % Success | Percentile | % 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
|
100.00
|
100.00
|
||||||||
| 2.50 % |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
||||||||
| 3.00 % |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
100% Succ. 3.286% |
100.00
|
100% Succ. 3.168% |
100.00
|
100% Succ. 3.105% |
100.00
|
100% Succ. 3.069% |
||||
| 3.50 % |
100.00
|
100.00
|
100.00
|
100.00
|
100% Succ. 3.560% |
98.50
|
95% Succ. 3.747% |
96.05
|
95% Succ. 3.574% |
93.35
|
90% Succ. 3.597% |
90.46
|
90% Succ. 3.533% |
|||
| 4.00 % |
100.00
|
100.00
|
100.00
|
100% Succ. 4.095% |
96.12
|
95% Succ. 4.077% |
88.35
|
80% Succ. 4.299% |
81.50
|
80% Succ. 4.048% |
71.47
|
50% Succ. 4.470% |
61.41
|
50% Succ. 4.161% |
||
| 4.50 % |
100.00
|
100.00
|
97.27
|
95% Succ. 4.758% |
87.10
|
80% Succ. 4.826% |
74.88
|
50% Succ. 4.973% |
64.45
|
50% Succ. 4.751% |
48.48
|
34.85
|
||||
| 5.00 % |
100.00
|
100.00
|
100% Succ. 5.216% |
90.84
|
90% Succ. 5.060% |
73.51
|
50% Succ. 5.356% |
47.42
|
28.27
|
26.87
|
18.26
|
|||||
| 5.50 % |
100.00
|
99.06
|
79.90
|
43.83
|
17.97
|
8.32
|
5.54
|
4.98
|
||||||||
| 6.00 % |
100.00
|
95.42
|
95% Succ. 6.018% |
56.36
|
50% Succ. 6.174% |
28.29
|
5.32
|
1.46
|
1.94
|
1.24
|
||||||
| 6.50 % |
100.00
|
89.70
|
80% Succ. 6.855% |
38.64
|
19.28
|
1.66
|
0.62
|
0.55
|
0.83
|
|||||||
| 7.00 % |
100.00
|
75.13
|
26.28
|
11.10
|
0.50
|
0.42
|
0.55
|
0.00
|
||||||||
| 7.50 % |
100.00
|
61.50
|
50% Succ. 7.876% |
14.15
|
2.91
|
0.33
|
0.00
|
0.00
|
0.00
|
|||||||
| 8.00 % |
100.00
|
44.54
|
4.40
|
1.39
|
0.00
|
0.00
|
0.00
|
0.00
|
Swipe left to see all data
| Withdrawal Rate |
10 Years
|
10 Years
|
20 Years
|
20 Years
|
30 Years
|
30 Years
|
|---|---|---|---|---|---|---|
| % Success | Percentile | % Success | Percentile | % Success | Percentile | |
| 2.00 % |
100.00
|
100.00
|
100.00
|
|||
| 2.50 % |
100.00
|
100.00
|
100.00
|
|||
| 3.00 % |
100.00
|
100.00
|
100.00
|
|||
| 3.50 % |
100.00
|
100.00
|
100.00
|
|||
| 4.00 % |
100.00
|
100.00
|
100.00
|
|||
| 4.50 % |
100.00
|
100.00
|
100.00
|
|||
| 5.00 % |
100.00
|
100.00
|
100.00
|
|||
| 5.50 % |
100.00
|
100.00
|
100.00
|
|||
| 6.00 % |
100.00
|
100.00
|
100.00
|
100% Succ. 6.088% |
||
| 6.50 % |
100.00
|
100.00
|
92.53
|
90% Succ. 6.581% |
||
| 7.00 % |
100.00
|
100.00
|
100% Succ. 7.357% |
70.54
|
50% Succ. 7.357% |
|
| 7.50 % |
100.00
|
97.51
|
95% Succ. 7.658% |
43.57
|
||
| 8.00 % |
100.00
|
82.83
|
12.45
|
Simulations are calculated with actual returns of Golden Butterfly 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 2024
Related Pages
For the Golden Butterfly 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
