US Stocks/Bonds 100/0 Portfolio: 3% withdrawal simulation

Last Update: 31 January 2024

You decided on a 3% withdrawal strategy and implemented the US Stocks/Bonds 100/0 Portfolio: how likely, so far, your investment would have been enough for your retirement?.

With a 3% withdrawal strategy, you would have lived on your investiment for 30 years in the 99.93% of cases, and for 50 years in the 99.76% of cases.

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 2.895% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.

In this post, we will simulate different retirement timeframes and check the sustainability of the withdrawal rate, using actual historical series.

Success Rate of a 3% Withdrawal Strategy

Let's calculate the success rate of a 3% Withdrawal Strategy, on the US Stocks/Bonds 100/0 Portfolio. Would you have also saved a portion of your invested capital, at the end of your retirement?

As usual, the withdrawal is expressed as a yearly rate and refers to the initial capital. After that, the withdrawal amount is monthly adjusted for inflation.

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  • Each month, money is withdrawn from the portfolio. The withdrawal rate is calculated based on the initial withdrawn, annualized.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

We are calculating the success rate over all the past N-year timeframes, on actual historical data, also focusing on how much capital (inflation adjusted) will remain after the retirement.

Period: Jan 1871 - Jan 2024
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3%
Withdrawal Rate
% Success
20 Years 30 Years 40 Years 50 Years 60 Years 70 Years
Success Rate (%)
At least 0% Preserved Capital
100.00
99.93
99.85
99.76
99.73
99.60
Fail Rate(%)
0.00
0.07
0.15
0.24
0.27
0.40
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 25%
99.75
99.86
99.78
99.76
99.64
99.60
At least 50%
98.75
99.66
99.78
99.68
99.64
99.60
At least 75%
93.05
99.39
99.63
99.60
99.64
99.60
At least 100%
83.79
97.16
99.26
99.35
99.64
99.60
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Period: Feb 1924 - Jan 2024
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3%
Withdrawal Rate
% Success
20 Years 30 Years 40 Years 50 Years 60 Years 70 Years
Success Rate (%)
At least 0% Preserved Capital
100.00
99.88
99.72
99.50
99.38
98.89
Fail Rate(%)
0.00
0.12
0.28
0.50
0.62
1.11
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 25%
99.58
99.76
99.58
99.50
99.17
98.89
At least 50%
98.54
99.64
99.58
99.33
99.17
98.89
At least 75%
92.92
99.52
99.31
99.17
99.17
98.89
At least 100%
84.08
99.05
99.03
98.67
99.17
98.89
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Period: Feb 1974 - Jan 2024
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3%
Withdrawal Rate
% Success
20 Years 30 Years
Success Rate (%)
At least 0% Preserved Capital
100.00
100.00
Fail Rate(%)
0.00
0.00
Preserved Capital (infl. adj.) % Success, on % Preserved Capital
At least 25%
100.00
100.00
At least 50%
100.00
100.00
At least 75%
99.72
100.00
At least 100%
95.57
100.00
Legend: Min% of Protected Capital
Min 0%
Min 25%
Min 50%
Min 75%
Min 100%
Simulations are calculated with actual returns of US Stocks/Bonds 100/0 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 January 2024

3% vs Perpetual/Safe Withdrawal Rates

Let's compare a 3% withdrawal with the Safe and Perpetual Withdrawal Rates, over different timeframes.

In the table below, the guaranteed thresholds of Success/Preserved Capital are highlighted in green, elsewhere in red. To review a specific timeframe for this portfolio, click on the links in the table.

Period: Jan 1871 - Jan 2024
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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
May 1901
0.860
Jul 1901
1.765
Sep 1929
2.546
Sep 1929
3.326
Sep 1929
5.128 5.479 6.148 8.929
30 Years
Worst Period (from)
1.062
Jun 1902
1.981
Jun 1902
2.619
Sep 1929
2.757
Sep 1929
2.895
Sep 1929
4.365 4.651 5.193 7.412
40 Years
Worst Period (from)
2.492
Sep 1929
2.565
Sep 1929
2.637
Sep 1929
2.710
Sep 1929
2.782
Sep 1929
4.020 4.238 4.741 6.536
50 Years
Worst Period (from)
2.391
Sep 1929
2.466
Sep 1929
2.542
Sep 1929
2.617
Sep 1929
2.693
Sep 1929
3.829 4.044 4.484 5.971
60 Years
Worst Period (from)
2.526
Sep 1929
2.553
Sep 1929
2.581
Sep 1929
2.608
Sep 1929
2.636
Sep 1929
3.885 4.146 4.701 6.044
70 Years
Worst Period (from)
2.581
Sep 1929
2.589
Sep 1929
2.598
Sep 1929
2.606
Sep 1929
2.615
Sep 1929
3.835 4.032 4.652 6.092
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Feb 1924 - Jan 2024
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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)
0.205
Sep 1929
0.985
Sep 1929
1.765
Sep 1929
2.546
Sep 1929
3.326
Sep 1929
4.960 5.267 6.079 9.094
30 Years
Worst Period (from)
2.343
Sep 1929
2.481
Sep 1929
2.619
Sep 1929
2.757
Sep 1929
2.895
Sep 1929
4.223 4.532 5.261 7.990
40 Years
Worst Period (from)
2.492
Sep 1929
2.565
Sep 1929
2.637
Sep 1929
2.710
Sep 1929
2.782
Sep 1929
3.939 4.193 4.758 7.012
50 Years
Worst Period (from)
2.391
Sep 1929
2.466
Sep 1929
2.542
Sep 1929
2.617
Sep 1929
2.693
Sep 1929
3.738 3.969 4.380 6.209
60 Years
Worst Period (from)
2.526
Sep 1929
2.553
Sep 1929
2.581
Sep 1929
2.608
Sep 1929
2.636
Sep 1929
4.019 4.498 5.082 6.765
70 Years
Worst Period (from)
2.581
Sep 1929
2.589
Sep 1929
2.598
Sep 1929
2.606
Sep 1929
2.615
Sep 1929
3.795 4.427 5.556 7.661
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)
2.010
Apr 2000
2.678
Apr 2000
3.346
Apr 2000
4.014
Apr 2000
4.682
Apr 2000
5.405 6.236 7.956 9.852
30 Years
Worst Period (from)
5.265
Feb 1974
5.462
Feb 1974
5.659
Feb 1974
5.856
Feb 1974
6.053
Feb 1974
7.356 7.602 8.148 8.804
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Simulations are calculated with actual returns of US Stocks/Bonds 100/0 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 January 2024

Related Pages

Portfolio Main Page:
US Stocks/Bonds 100/0 Portfolio

For the US Stocks/Bonds 100/0 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