Short Term Treasury Portfolio: how to retire safely

Last Update: 30 September 2024

The Short Term Treasury Portfolio invests in 1 asset class and is allocated for 0% on Stocks.

In the period Jan 1871 - Sep 2024, the portfolio granted a 4.43% annualized return, with a -8.52% maximum drawdown.

Key Points

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 2.339% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 60.7% of cases, and for 50 years in the 16.61% of cases .

In this post we will find out the most affordable withdrawal strategies for the Short Term Treasury 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 Short Term Treasury Portfolio

The Short Term Treasury Portfolio contains 100% Bonds.

Weight Asset Class Category
100.00 % US Short Term (1-3y) Treasuries Fixed Income

Over the last 30 years (last update: September 2024), the portfolio has returned 3.17% annualized, with a maximum drawdown of -5.36%.

4.394% has been a safe withdrawal rate.

Let's consider different timeframes, all ending at September 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 Sep 2024
Withdrawal Rate (%)
Investment Performances
Timeframe Period from Period to Perpetual Safe Ann.Return(%)
[ Infl.Adj. ]		 Max
Drawdown(%)
10 Years 1 Oct 2014
 30 Sep 2024 0.000 9.407 1.26
[ -1.53 ] 		-5.36
Jun 2021 - Oct 2022
20 Years 1 Oct 2004
 30 Sep 2024 0.000 4.959 1.83
[ -0.72 ] 		-5.36
Jun 2021 - Oct 2022
30 Years 1 Oct 1994
 30 Sep 2024 0.765 4.394 3.17
[ 0.64 ] 		-5.36
Jun 2021 - Oct 2022
40 Years 1 Oct 1984
 30 Sep 2024 2.259 4.644 4.51
[ 1.68 ] 		-5.36
Jun 2021 - Oct 2022
50 Years 1 Oct 1974
 30 Sep 2024 2.118 3.662 5.53
[ 1.74 ] 		-5.36
Jun 2021 - Oct 2022
60 Years 1 Oct 1964
 30 Sep 2024 1.562 2.699 5.44
[ 1.45 ] 		-8.52
Apr 1971 - Jul 1971
70 Years 1 Oct 1954
 30 Sep 2024 1.531 2.405 5.09
[ 1.46 ] 		-8.52
Apr 1971 - Jul 1971
80 Years 1 Oct 1944
 30 Sep 2024 0.808 1.516 4.65
[ 0.96 ] 		-8.52
Apr 1971 - Jul 1971
Simulations are calculated with actual returns of Short Term Treasury 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 | Inflation is updated at August 2024

Withdrawal Rates Simulation (updated at Sep 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 Short Term Treasury 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 - Sep 2024
Period: Oct 1924 - Sep 2024
Period: Oct 1974 - Sep 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
May 1910 		1.352
May 1941 		4.461
May 1941 		7.569
May 1941 		8.146 8.887 9.631 10.914
20 Years
Worst Period (from) 		0.000
Sep 1898 		0.000
Apr 1932 		0.618
Jul 1933 		2.102
Aug 1939 		3.462
Feb 1941 		3.981 4.150 5.118 5.854
30 Years
Worst Period (from) 		0.000
Dec 1930 		0.000
Mar 1933 		0.804
Jun 1933 		1.573
Jun 1939 		2.339
Jun 1939 		2.560 2.820 3.761 4.185
40 Years
Worst Period (from) 		0.000
Aug 1931 		0.000
Apr 1939 		0.466
Apr 1940 		1.147
Dec 1940 		1.793
Jun 1939 		1.947 2.143 2.932 3.429
50 Years
Worst Period (from) 		0.000
Dec 1930 		0.203
Jun 1933 		0.644
Jun 1933 		1.085
Jun 1933 		1.485
Jun 1939 		1.571 1.782 2.388 2.925
60 Years
Worst Period (from) 		0.444
Jun 1933 		0.670
Jun 1933 		0.896
Jun 1933 		1.122
Jun 1933 		1.347
Jun 1939 		1.409 1.503 2.025 2.476
70 Years
Worst Period (from) 		0.345
May 1911 		0.691
May 1911 		0.951
Jun 1933 		1.100
Jun 1933 		1.250
Jun 1933 		1.313 1.368 1.732 2.174
80 Years
Worst Period (from) 		0.588
Jun 1939 		0.737
Jun 1939 		0.887
Jun 1939 		1.037
Jun 1939 		1.180
Jun 1933 		1.234 1.262 1.604 1.969
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) 		0.000
Aug 1932 		0.000
Dec 1936 		1.352
May 1941 		4.461
May 1941 		7.569
May 1941 		8.073 8.939 9.553 10.580
20 Years
Worst Period (from) 		0.000
Aug 1930 		0.000
Apr 1932 		0.618
Jul 1933 		2.102
Aug 1939 		3.462
Feb 1941 		3.814 4.004 4.927 5.699
30 Years
Worst Period (from) 		0.000
Dec 1930 		0.000
Mar 1933 		0.804
Jun 1933 		1.573
Jun 1939 		2.339
Jun 1939 		2.504 2.568 2.915 4.029
40 Years
Worst Period (from) 		0.000
Aug 1931 		0.000
Apr 1939 		0.466
Apr 1940 		1.147
Dec 1940 		1.793
Jun 1939 		1.903 1.951 2.156 3.332
50 Years
Worst Period (from) 		0.000
Dec 1930 		0.203
Jun 1933 		0.644
Jun 1933 		1.085
Jun 1933 		1.485
Jun 1939 		1.549 1.569 1.757 2.825
60 Years
Worst Period (from) 		0.444
Jun 1933 		0.670
Jun 1933 		0.896
Jun 1933 		1.122
Jun 1933 		1.347
Jun 1939 		1.392 1.405 1.448 2.248
70 Years
Worst Period (from) 		0.653
Jun 1933 		0.802
Jun 1933 		0.951
Jun 1933 		1.100
Jun 1933 		1.250
Jun 1933 		1.280 1.307 1.324 1.659
80 Years
Worst Period (from) 		0.588
Jun 1939 		0.737
Jun 1939 		0.887
Jun 1939 		1.037
Jun 1939 		1.180
Jun 1933 		1.204 1.224 1.237 1.394
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) 		0.000
Sep 2007 		0.717
Oct 2013 		3.621
Nov 2013 		6.524
Nov 2013 		9.401
Dec 2013 		9.512 9.590 10.095 11.364
20 Years
Worst Period (from) 		0.000
Nov 2001 		0.419
Jul 2003 		1.919
Jul 2003 		3.419
Jan 2004 		4.879
Jan 2004 		4.976 5.300 5.847 6.546
30 Years
Worst Period (from) 		0.488
Oct 1993 		1.431
Oct 1993 		2.375
Oct 1993 		3.318
Oct 1993 		4.248
Feb 1994 		4.315 4.412 4.848 5.097
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Simulations are calculated with actual returns of Short Term Treasury 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 | Inflation is updated at August 2024

Withdrawals and Success Rate

If you had implemented a specific Withdrawal Strategy with the Short Term Treasury 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 - Sep 2024
Period: Oct 1924 - Sep 2024
Period: Oct 1974 - Sep 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% Succ.
2.339%
92.53
90% Succ.
2.143%
85.47
80% Succ.
2.388%
80.91
80% Succ.
2.025%
67.79
50% Succ.
2.174%
47.74
2.50 %
100.00
100.00
97.17
95% Succ.
2.560%
86.46
80% Succ.
2.932%
77.13
50% Succ.
2.925%
48.40
31.81
31.15
3.00 %
100.00
100.00
100% Succ.
3.462%
88.56
77.96
50% Succ.
3.429%
43.90
25.04
23.86
22.12
3.50 %
100.00
99.50
95% Succ.
3.981%
86.34
80% Succ.
3.761%
44.36
23.11
19.98
17.00
18.17
4.00 %
100.00
94.21
90% Succ.
4.150%
60.70
50% Succ.
4.185%
30.60
16.61
14.74
14.41
12.87
4.50 %
100.00
89.60
41.52
21.45
12.52
12.08
10.44
8.35
5.00 %
100.00
82.38
80% Succ.
5.118%
31.76
15.30
9.63
8.35
7.06
6.43
5.50 %
100.00
63.20
50% Succ.
5.854%
22.95
11.27
6.10
5.68
5.17
4.85
6.00 %
100.00
46.58
16.15
7.91
4.82
4.17
4.08
3.72
6.50 %
100.00
38.17
12.38
5.20
3.77
3.11
2.39
1.13
7.00 %
100.00
31.63
8.48
4.17
2.81
1.33
0.50
0.00
7.50 %
100.00
100% Succ.
7.569%
24.47
6.06
3.37
1.28
0.00
0.00
0.00
8.00 %
96.52
14.69
3.84
2.20
0.16
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% Succ.
2.339%
85.85
80% Succ.
2.156%
69.88
59.46
50% Succ.
2.248%
41.27
11.62
2.50 %
100.00
100.00
95.01
95% Succ.
2.504%
74.34
63.73
50% Succ.
2.825%
34.51
2.49
0.00
3.00 %
100.00
100.00
100% Succ.
3.462%
79.79
65.46
50% Succ.
3.332%
30.95
0.00
0.00
0.00
3.50 %
100.00
99.17
95% Succ.
3.814%
76.10
30.37
1.00
0.00
0.00
0.00
4.00 %
100.00
90.32
90% Succ.
4.004%
51.96
50% Succ.
4.029%
17.61
0.00
0.00
0.00
0.00
4.50 %
100.00
82.62
80% Succ.
4.927%
30.20
10.82
0.00
0.00
0.00
0.00
5.00 %
100.00
77.73
18.31
5.13
0.00
0.00
0.00
0.00
5.50 %
100.00
56.61
50% Succ.
5.699%
9.87
2.08
0.00
0.00
0.00
0.00
6.00 %
100.00
38.09
5.71
0.00
0.00
0.00
0.00
0.00
6.50 %
100.00
26.74
3.09
0.00
0.00
0.00
0.00
0.00
7.00 %
100.00
18.21
0.59
0.00
0.00
0.00
0.00
0.00
7.50 %
100.00
100% Succ.
7.569%
10.30
0.00
0.00
0.00
0.00
0.00
0.00
8.00 %
96.02
4.58
0.00
0.00
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
100% Succ.
4.248%
4.50 %
100.00
100.00
100% Succ.
4.879%
87.97
80% Succ.
4.848%
5.00 %
100.00
93.07
90% Succ.
5.300%
63.49
50% Succ.
5.097%
5.50 %
100.00
88.09
80% Succ.
5.847%
34.44
6.00 %
100.00
77.29
19.92
6.50 %
100.00
52.35
50% Succ.
6.546%
10.79
7.00 %
100.00
31.30
2.07
7.50 %
100.00
20.22
0.00
8.00 %
100.00
12.19
0.00
Simulations are calculated with actual returns of Short Term Treasury 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 | Inflation is updated at August 2024

Related Pages

For the Short Term Treasury 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%   

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