All Weather Portfolio: how to retire safely

Last Update: 31 January 2024

The Ray Dalio All Weather Portfolio invests in 5 asset classes and is allocated for 30% on Stocks.

In the period Jan 1871 - Jan 2024, the portfolio granted a 6.15% annualized return, with a -37.82% maximum drawdown.

Key Points

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.448% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 86.67% of cases, and for 50 years in the 34.17% of cases .

In this post we will find out the most affordable withdrawal strategies for the Ray Dalio All Weather 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 Ray Dalio All Weather Portfolio

The Ray Dalio All Weather Portfolio contains 30% Stocks, 55% Bonds, 15% Commodities.

Weight Asset Class Category
30.00 % Total US Stock Market Stocks
40.00 % US Long Term (20y+) Treasuries Fixed Income
15.00 % US Intermediate Term (3-7y) Treasuries Fixed Income
7.50 % Gold Commodities
7.50 % Commodities Commodities
Commodities: 1871-1970: data source extended with yearly real price variations of an equal-weighted commodity basket.

Over the last 30 years (last update: January 2024), the portfolio has returned 6.83% annualized, with a maximum drawdown of -20.75%.

6.55% has been a safe withdrawal rate.

Let's consider different timeframes, all ending at January 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 Jan 2024
Withdrawal Rate (%)
Investment Performances
Timeframe Period from Period to Perpetual Safe Ann.Return(%)
[ Infl.Adj. ]
Max
Drawdown(%)
20 Years 1 Feb 2004
31 Jan 2024 3.605 7.450 6.03
[ 3.36 ]
-20.75
Jan 2022 - Sep 2022
30 Years 1 Feb 1994
31 Jan 2024 4.647 6.550 6.83
[ 4.21 ]
-20.75
Jan 2022 - Sep 2022
40 Years 1 Feb 1984
31 Jan 2024 6.992 7.938 8.42
[ 5.46 ]
-20.75
Jan 2022 - Sep 2022
50 Years 1 Feb 1974
31 Jan 2024 4.118 4.612 8.60
[ 4.57 ]
-20.75
Jan 2022 - Sep 2022
60 Years 1 Feb 1964
31 Jan 2024 3.197 3.519 8.13
[ 4.06 ]
-20.75
Jan 2022 - Sep 2022
70 Years 1 Feb 1954
31 Jan 2024 3.440 3.667 7.74
[ 4.05 ]
-20.75
Jan 2022 - Sep 2022
Simulations are calculated with actual returns of Ray Dalio All Weather 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 2024

Withdrawal Rates Simulation (updated at Jan 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 Ray Dalio All Weather 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 - Jan 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 20 Years
Worst Period (from)
0.000
Aug 1898
0.000
Jul 1900
1.546
Jul 1901
3.189
Jul 1901
4.502
Apr 1911
4.999 5.143 5.474 7.057
30 Years
Worst Period (from)
0.365
Jul 1890
1.516
Jul 1890
2.393
Feb 1946
2.939
May 1901
3.448
May 1901
3.790 3.937 4.172 5.039
40 Years
Worst Period (from)
1.022
Oct 1941
1.579
Apr 1940
2.086
Apr 1940
2.593
Apr 1940
2.932
Feb 1946
3.191 3.311 3.530 4.070
50 Years
Worst Period (from)
1.817
Jul 1901
2.026
Feb 1937
2.224
Feb 1937
2.423
Feb 1937
2.621
Feb 1937
2.826 2.950 3.160 3.707
60 Years
Worst Period (from)
1.972
Jul 1901
2.117
Jul 1901
2.258
Feb 1937
2.361
Feb 1937
2.464
Feb 1937
2.650 2.743 2.942 3.493
70 Years
Worst Period (from)
1.916
Jul 1901
2.043
Jul 1901
2.169
Jul 1901
2.296
Jul 1901
2.388
Feb 1937
2.544 2.604 2.767 3.251
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Feb 1924 - Jan 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 20 Years
Worst Period (from)
0.000
Oct 1961
1.400
Oct 1961
2.812
Oct 1961
4.008
Mar 1937
4.932
Feb 1946
5.221 5.395 5.767 7.061
30 Years
Worst Period (from)
1.000
May 1940
1.706
May 1940
2.393
Feb 1946
3.011
Feb 1946
3.629
Feb 1946
3.929 4.132 4.306 5.039
40 Years
Worst Period (from)
1.022
Oct 1941
1.579
Apr 1940
2.086
Apr 1940
2.593
Apr 1940
2.932
Feb 1946
3.178 3.294 3.706 4.117
50 Years
Worst Period (from)
1.823
Dec 1936
2.026
Feb 1937
2.224
Feb 1937
2.423
Feb 1937
2.621
Feb 1937
2.773 2.857 3.182 3.741
60 Years
Worst Period (from)
2.052
Mar 1937
2.156
Feb 1937
2.258
Feb 1937
2.361
Feb 1937
2.464
Feb 1937
2.616 2.669 2.944 3.549
70 Years
Worst Period (from)
2.154
Feb 1937
2.212
Feb 1937
2.271
Feb 1937
2.330
Feb 1937
2.388
Feb 1937
2.526 2.564 2.707 3.390
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Feb 1974 - Jan 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 20 Years
Worst Period (from)
3.460
Nov 2003
4.432
Mar 1974
5.023
Mar 1974
5.615
Mar 1974
6.206
Feb 1974
7.162 7.316 7.508 8.332
30 Years
Worst Period (from)
4.189
Feb 1974
4.463
Feb 1974
4.737
Feb 1974
5.011
Feb 1974
5.285
Feb 1974
6.063 6.207 6.570 7.121
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Simulations are calculated with actual returns of Ray Dalio All Weather 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 2024

Withdrawals and Success Rate

If you had implemented a specific Withdrawal Strategy with the Ray Dalio All Weather 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 - Jan 2024
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
100.00
100% Succ.
2.464%
100.00
100% Succ.
2.388%
2.50 %
100.00
100.00
100.00
100% Succ.
2.932%
100.00
100% Succ.
2.621%
99.73
95% Succ.
2.650%
98.00
95% Succ.
2.544%
3.00 %
100.00
100.00
100% Succ.
3.448%
99.78
95% Succ.
3.191%
88.61
80% Succ.
3.160%
73.88
50% Succ.
3.493%
58.72
50% Succ.
3.251%
3.50 %
100.00
99.86
95% Succ.
3.790%
81.30
80% Succ.
3.530%
62.12
50% Succ.
3.707%
49.55
40.88
4.00 %
100.00
86.67
80% Succ.
4.172%
53.98
50% Succ.
4.070%
34.17
26.57
26.55
4.50 %
100.00
100% Succ.
4.502%
63.94
39.25
24.15
17.71
16.43
5.00 %
94.81
90% Succ.
5.143%
50.95
50% Succ.
5.039%
31.00
15.43
11.18
10.42
5.50 %
79.35
41.20
23.86
9.45
8.05
7.62
6.00 %
69.52
35.79
16.13
6.62
4.65
2.61
6.50 %
58.14
29.03
12.15
4.28
0.45
0.00
7.00 %
51.38
50% Succ.
7.057%
19.76
8.98
0.48
0.00
0.00
7.50 %
40.43
12.45
4.86
0.00
0.00
0.00
8.00 %
32.67
9.34
1.40
0.00
0.00
0.00
Period: Feb 1924 - Jan 2024
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
100.00
100% Succ.
2.464%
100.00
100% Succ.
2.388%
2.50 %
100.00
100.00
100.00
100% Succ.
2.932%
100.00
100% Succ.
2.621%
99.38
95% Succ.
2.616%
97.23
95% Succ.
2.526%
3.00 %
100.00
100.00
99.58
95% Succ.
3.178%
86.36
80% Succ.
3.182%
74.84
60.11
50% Succ.
3.390%
3.50 %
100.00
100.00
100% Succ.
3.629%
85.16
80% Succ.
3.706%
69.05
50% Succ.
3.741%
54.05
50% Succ.
3.549%
41.27
4.00 %
100.00
92.87
90% Succ.
4.132%
57.28
50% Succ.
4.117%
27.79
11.64
13.85
4.50 %
100.00
100% Succ.
4.932%
69.44
38.83
14.31
6.44
3.32
5.00 %
99.90
95% Succ.
5.221%
51.01
50% Succ.
5.039%
26.49
6.32
0.00
0.00
5.50 %
86.37
80% Succ.
5.767%
40.55
21.36
0.00
0.00
0.00
6.00 %
73.57
34.60
11.51
0.00
0.00
0.00
6.50 %
59.11
28.54
8.46
0.00
0.00
0.00
7.00 %
51.30
50% Succ.
7.061%
17.95
6.52
0.00
0.00
0.00
7.50 %
40.17
9.16
4.58
0.00
0.00
0.00
8.00 %
31.32
7.13
2.50
0.00
0.00
0.00
Period: Feb 1974 - Jan 2024
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
5.00 %
100.00
100.00
100% Succ.
5.285%
5.50 %
100.00
98.76
6.00 %
100.00
100% Succ.
6.206%
96.68
95% Succ.
6.063%
6.50 %
99.17
82.57
80% Succ.
6.570%
7.00 %
98.06
95% Succ.
7.162%
58.51
50% Succ.
7.121%
7.50 %
80.89
80% Succ.
7.508%
31.95
8.00 %
66.48
24.90
Simulations are calculated with actual returns of Ray Dalio All Weather 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 2024

Related Pages

For the Ray Dalio All Weather 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