Golden Butterfly Portfolio: how to retire safely

Last Update: 30 April 2024

The Golden Butterfly Portfolio invests in 5 asset classes and is allocated for 40% on Stocks.

In the period Jan 1871 - Apr 2024, the portfolio granted a 6.91% 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Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.589% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 94.73% of cases, and for 50 years in the 66.8% 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: April 2024), the portfolio has returned 7.63% annualized, with a maximum drawdown of -17.95%.

6.995% has been a safe withdrawal rate.

Let's consider different timeframes, all ending at April 2024: which Withdrawal Rates could you have applied without running out of money in your retirement?

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 Apr 2024
Withdrawal Rate (%)
Investment Performances
Timeframe Period from Period to Perpetual Safe Ann.Return(%)
[ Infl.Adj. ]
Max
Drawdown(%)
10 Years 1 May 2014
30 Apr 2024 2.985 12.150 5.78
[ 2.86 ]
-17.95
Jan 2022 - Sep 2022
20 Years 1 May 2004
30 Apr 2024 4.968 8.408 7.28
[ 4.57 ]
-17.95
Jan 2022 - Sep 2022
30 Years 1 May 1994
30 Apr 2024 5.357 6.995 7.63
[ 4.96 ]
-17.95
Jan 2022 - Sep 2022
40 Years 1 May 1984
30 Apr 2024 6.441 7.286 8.51
[ 5.53 ]
-17.95
Jan 2022 - Sep 2022
50 Years 1 May 1974
30 Apr 2024 5.485 5.911 9.43
[ 5.40 ]
-17.95
Jan 2022 - Sep 2022
60 Years 1 May 1964
30 Apr 2024 4.574 4.822 9.21
[ 5.07 ]
-17.95
Jan 2022 - Sep 2022
70 Years 1 May 1954
30 Apr 2024 4.935 5.089 8.89
[ 5.13 ]
-17.95
Jan 2022 - Sep 2022
80 Years 1 May 1944
30 Apr 2024 4.056 4.152 8.67
[ 4.82 ]
-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 April 2024

Withdrawal Rates Simulation (updated at Apr 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?

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

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.

Period: Jan 1871 - Apr 2024
Period: May 1924 - Apr 2024
Period: May 1974 - Apr 2024
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 11.237 12.560
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 6.416 7.698
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 4.611 5.972
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 5.189
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 4.752
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 3.366 4.377
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 3.225 4.049
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 3.792
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 12.652
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 4.754
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 4.186
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
12.086 12.251 12.474 13.106
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 8.021 8.578
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 6.760 7.389
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 April 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.

Period: Jan 1871 - Apr 2024
Period: May 1924 - Apr 2024
Period: May 1974 - Apr 2024
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%
95.36
95% Succ.
3.021%
92.41
90% Succ.
3.056%
87.97
80% Succ.
3.115%
3.50 %
100.00
100.00
100.00
100% Succ.
3.589%
95.08
95% Succ.
3.512%
84.45
80% Succ.
3.583%
74.49
67.23
59.70
50% Succ.
3.792%
4.00 %
100.00
100.00
94.73
90% Succ.
4.222%
78.03
66.80
58.34
50% Succ.
4.377%
51.35
50% Succ.
4.049%
44.84
4.50 %
100.00
100.00
100% Succ.
4.543%
82.51
80% Succ.
4.611%
66.57
56.33
50% Succ.
4.752%
47.01
36.66
30.53
5.00 %
100.00
96.06
95% Succ.
5.095%
75.02
57.31
50% Succ.
5.189%
37.87
27.12
25.97
23.16
5.50 %
100.00
88.69
65.16
50% Succ.
5.972%
38.13
21.35
16.95
15.28
14.87
6.00 %
100.00
84.20
80% Succ.
6.416%
49.09
26.52
12.49
7.94
6.69
4.88
6.50 %
100.00
78.58
36.87
19.84
5.88
2.59
2.00
2.27
7.00 %
100.00
66.96
25.93
11.98
1.77
0.98
0.70
0.34
7.50 %
100.00
100% Succ.
7.667%
55.09
50% Succ.
7.698%
16.81
4.34
0.73
0.00
0.00
0.00
8.00 %
99.30
41.35
8.17
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.
4.186%
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.
4.754%
48.48
37.34
5.00 %
100.00
100.00
100% Succ.
5.216%
90.84
90% Succ.
5.060%
73.51
50% Succ.
5.356%
47.42
29.52
27.98
20.75
5.50 %
100.00
99.06
79.90
43.83
17.97
9.56
7.20
7.47
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
1.00
0.62
0.55
0.83
7.00 %
100.00
75.13
26.28
10.26
0.33
0.42
0.55
0.00
7.50 %
100.00
61.50
50% Succ.
7.876%
14.51
2.50
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%
70.12
50% Succ.
7.389%
7.50 %
100.00
97.51
95% Succ.
7.658%
44.81
8.00 %
100.00
82.55
12.86
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 April 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