Permanent Portfolio: how to retire safely

Last Update: 28 February 2023

The Harry Browne Permanent Portfolio invests in 4 asset classes and can be suitable for a retirement plan.

In this post we will find out the most affordable withdrawal strategies for the Harry Browne Permanent Portfolio. All calculations are made on actual historical series.

Key Points

The Harry Browne Permanent Portfolio is allocated for 25% on Stocks.

In the period Jan 1871 - Feb 2023, the portfolio granted a 5.61% annualized return, with a -31.62% maximum drawdown.

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.304% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 77.3% of cases, and for 50 years in the 31.13% of cases

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 Harry Browne Permanent Portfolio

The Harry Browne Permanent Portfolio contains 25% Stocks, 50% Bonds, 25% Commodities.

Weight Asset Class Category
25.00 % Total US Stock Market Stocks
25.00 % US T-Bills (1-3mths) Fixed Income
25.00 % US Long Term (20y+) Treasuries Fixed Income
25.00 % Gold Commodities

Over the last 30 years (last update: February 2023), the portfolio has returned 6.31% annualized, with a maximum drawdown of -16.38%.

5.944% has been a safe withdrawal rate.

Let's consider different timeframes, all ending at February 2023: 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 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 4.502 8.334 6.54
[ 3.96 ]
-16.38
Jan 2022 - Sep 2022
30 Years 1 Mar 1993
28 Feb 2023 3.963 5.944 6.31
[ 3.73 ]
-16.38
Jan 2022 - Sep 2022
40 Years 1 Mar 1983
28 Feb 2023 4.147 5.289 6.85
[ 3.91 ]
-16.38
Jan 2022 - Sep 2022
50 Years 1 Mar 1973
28 Feb 2023 3.477 4.173 7.75
[ 3.65 ]
-16.38
Jan 2022 - Sep 2022
60 Years 1 Mar 1963
28 Feb 2023 3.284 3.739 7.60
[ 3.57 ]
-16.38
Jan 2022 - Sep 2022
70 Years 1 Mar 1953
28 Feb 2023 3.232 3.552 7.15
[ 3.50 ]
-16.38
Jan 2022 - Sep 2022
Simulations are calculated with actual returns of Harry Browne Permanent 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

Withdrawal Rates Simulation (updated at Feb 2023)

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 Harry Browne Permanent 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. 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

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 - 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)
0.000
Feb 1898
0.014
Jul 1900
1.728
Jul 1901
3.301
Jul 1901
4.392
Jun 1911
4.774 4.957 5.379 6.841
30 Years
Worst Period (from)
0.327
Jul 1890
1.184
May 1940
1.910
May 1940
2.637
May 1940
3.304
Feb 1937
3.538 3.703 3.926 5.003
40 Years
Worst Period (from)
0.976
Sep 1936
1.420
Nov 1936
1.845
Feb 1937
2.262
Feb 1937
2.679
Feb 1937
2.957 3.125 3.308 4.127
50 Years
Worst Period (from)
1.526
Feb 1936
1.737
Dec 1936
1.945
Dec 1936
2.152
Feb 1937
2.354
Feb 1937
2.614 2.761 2.917 3.654
60 Years
Worst Period (from)
1.635
Feb 1937
1.775
Feb 1937
1.914
Feb 1937
2.054
Feb 1937
2.193
Feb 1937
2.397 2.521 2.660 3.329
70 Years
Worst Period (from)
1.632
Jul 1901
1.793
Jul 1901
1.922
Feb 1937
2.008
Feb 1937
2.094
Feb 1937
2.267 2.369 2.474 3.012
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Mar 1923 - 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)
0.042
Jul 1933
1.239
Mar 1937
2.367
Mar 1937
3.495
Mar 1937
4.590
Jan 1940
4.832 5.255 5.959 6.785
30 Years
Worst Period (from)
0.458
May 1940
1.184
May 1940
1.910
May 1940
2.637
May 1940
3.304
Feb 1937
3.482 3.713 4.291 5.032
40 Years
Worst Period (from)
0.976
Sep 1936
1.420
Nov 1936
1.845
Feb 1937
2.262
Feb 1937
2.679
Feb 1937
2.811 2.980 3.251 4.170
50 Years
Worst Period (from)
1.526
Feb 1936
1.737
Dec 1936
1.945
Dec 1936
2.152
Feb 1937
2.354
Feb 1937
2.474 2.604 2.848 3.746
60 Years
Worst Period (from)
1.635
Feb 1937
1.775
Feb 1937
1.914
Feb 1937
2.054
Feb 1937
2.193
Feb 1937
2.303 2.367 2.559 3.392
70 Years
Worst Period (from)
1.749
Feb 1937
1.835
Feb 1937
1.922
Feb 1937
2.008
Feb 1937
2.094
Feb 1937
2.194 2.237 2.370 3.072
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)
3.028
Apr 1974
3.816
Jul 1973
4.581
Jul 1973
5.345
Jul 1973
6.109
Jul 1973
6.515 6.778 6.977 7.351
30 Years
Worst Period (from)
3.089
Jul 1973
3.530
Jul 1973
3.971
Jul 1973
4.413
Jul 1973
4.854
Jul 1973
5.149 5.270 5.466 5.895
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Simulations are calculated with actual returns of Harry Browne Permanent 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

Withdrawals and Success Rate

If you had implemented a specific Withdrawal Strategy with the Harry Browne Permanent 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 - Feb 2023
Swipe left to see all data
Withdrawal
Rate
20 Years
30 Years
40 Years
50 Years
60 Years
70 Years
% Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile
2.00 %
100.00
100.00
100.00
100.00
100% Succ.
2.354%
100.00
100% Succ.
2.193%
100.00
100% Succ.
2.094%
2.50 %
100.00
100.00
100.00
100% Succ.
2.679%
96.98
95% Succ.
2.614%
91.15
90% Succ.
2.521%
77.81
3.00 %
100.00
100.00
100% Succ.
3.304%
94.14
90% Succ.
3.125%
74.82
59.26
50% Succ.
3.329%
50.76
50% Succ.
3.012%
3.50 %
100.00
96.39
95% Succ.
3.538%
69.27
58.68
50% Succ.
3.654%
40.11
29.89
4.00 %
100.00
100% Succ.
4.392%
77.30
57.61
50% Succ.
4.127%
31.13
22.67
19.05
4.50 %
99.75
95% Succ.
4.774%
67.21
34.89
19.80
11.11
10.84
5.00 %
88.91
80% Succ.
5.379%
50.10
50% Succ.
5.003%
25.98
9.86
8.04
6.89
5.50 %
78.45
36.61
12.62
6.85
4.16
2.33
6.00 %
71.64
25.70
8.39
3.42
0.18
0.00
6.50 %
55.01
50% Succ.
6.841%
13.91
5.35
0.41
0.00
0.00
7.00 %
46.69
7.91
2.45
0.00
0.00
0.00
7.50 %
30.50
5.59
0.00
0.00
0.00
0.00
8.00 %
19.47
2.52
0.00
0.00
0.00
0.00
Period: Mar 1923 - Feb 2023
Swipe left to see all data
Withdrawal
Rate
20 Years
30 Years
40 Years
50 Years
60 Years
70 Years
% Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile % Success Percentile
2.00 %
100.00
100.00
100.00
100.00
100% Succ.
2.354%
100.00
100% Succ.
2.193%
100.00
100% Succ.
2.094%
2.50 %
100.00
100.00
100.00
100% Succ.
2.679%
93.84
90% Succ.
2.604%
83.58
80% Succ.
2.559%
69.53
3.00 %
100.00
100.00
100% Succ.
3.304%
89.60
80% Succ.
3.251%
74.71
65.49
50% Succ.
3.392%
52.63
50% Succ.
3.072%
3.50 %
100.00
94.29
90% Succ.
3.713%
77.25
68.39
50% Succ.
3.746%
39.09
16.62
4.00 %
100.00
82.28
80% Succ.
4.291%
67.27
50% Succ.
4.170%
24.29
8.32
4.99
4.50 %
100.00
100% Succ.
4.590%
76.81
32.32
11.48
0.00
0.00
5.00 %
92.61
90% Succ.
5.255%
51.49
50% Succ.
5.032%
21.08
1.50
0.00
0.00
5.50 %
85.74
80% Succ.
5.959%
33.77
5.41
0.00
0.00
0.00
6.00 %
78.88
18.43
1.11
0.00
0.00
0.00
6.50 %
55.67
50% Succ.
6.785%
5.35
0.14
0.00
0.00
0.00
7.00 %
45.27
0.59
0.00
0.00
0.00
0.00
7.50 %
25.18
0.00
0.00
0.00
0.00
0.00
8.00 %
11.24
0.00
0.00
0.00
0.00
0.00
Period: Mar 1973 - Feb 2023
Swipe left to see all data
Withdrawal
Rate
20 Years
30 Years
% Success Percentile % Success Percentile
2.00 %
100.00
100.00
2.50 %
100.00
100.00
3.00 %
100.00
100.00
3.50 %
100.00
100.00
4.00 %
100.00
100.00
4.50 %
100.00
100.00
100% Succ.
4.854%
5.00 %
100.00
97.93
95% Succ.
5.149%
5.50 %
100.00
75.52
50% Succ.
5.895%
6.00 %
100.00
100% Succ.
6.109%
37.76
6.50 %
95.01
95% Succ.
6.515%
11.20
7.00 %
78.67
50% Succ.
7.351%
2.07
7.50 %
38.50
0.00
8.00 %
11.91
0.00
Simulations are calculated with actual returns of Harry Browne Permanent 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

Related Pages

For the Harry Browne Permanent 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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