US Stocks/Bonds 20/80 Portfolio: how to retire safely

Last Update: 31 October 2024

The US Stocks/Bonds 20/80 Portfolio invests in 2 asset classes and is allocated for 20% on Stocks.

In the period Jan 1871 - Oct 2024, the portfolio granted a 5.64% annualized return, with a -20.85% maximum drawdown.

Key Points

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.435% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 80.3% of cases, and for 50 years in the 26.46% of cases .

In this post we will find out the most affordable withdrawal strategies for the US Stocks/Bonds 20/80 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 US Stocks/Bonds 20/80 Portfolio

The US Stocks/Bonds 20/80 Portfolio contains 20% Stocks, 80% Bonds.

Weight Asset Class Category
20.00 % Total US Stock Market Stocks
80.00 % Total US Bond Market Fixed Income

Over the last 30 years (last update: October 2024), the portfolio has returned 5.83% annualized, with a maximum drawdown of -16.54%.

6.23% has been a safe withdrawal rate.

Let's consider different timeframes, all ending at October 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 Oct 2024
Withdrawal Rate (%)
Investment Performances
Timeframe Period from Period to Perpetual Safe Ann.Return(%)
[ Infl.Adj. ]		 Max
Drawdown(%)
10 Years 1 Nov 2014
 31 Oct 2024 0.849 10.816 3.73
[ 0.82 ] 		-16.54
Jan 2022 - Sep 2022
20 Years 1 Nov 2004
 31 Oct 2024 2.081 6.388 4.59
[ 1.99 ] 		-16.54
Jan 2022 - Sep 2022
30 Years 1 Nov 1994
 31 Oct 2024 3.824 6.230 5.83
[ 3.22 ] 		-16.54
Jan 2022 - Sep 2022
40 Years 1 Nov 1984
 31 Oct 2024 5.462 6.792 7.06
[ 4.16 ] 		-16.54
Jan 2022 - Sep 2022
50 Years 1 Nov 1974
 31 Oct 2024 4.093 4.823 7.70
[ 3.85 ] 		-16.54
Jan 2022 - Sep 2022
60 Years 1 Nov 1964
 31 Oct 2024 2.497 3.008 7.06
[ 3.00 ] 		-16.54
Jan 2022 - Sep 2022
70 Years 1 Nov 1954
 31 Oct 2024 2.684 3.057 6.75
[ 3.05 ] 		-16.54
Jan 2022 - Sep 2022
80 Years 1 Nov 1944
 31 Oct 2024 2.119 2.397 6.50
[ 2.73 ] 		-16.54
Jan 2022 - Sep 2022
Simulations are calculated with actual returns of US Stocks/Bonds 20/80 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 October 2024

Withdrawal Rates Simulation (updated at Oct 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 US Stocks/Bonds 20/80 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 - Oct 2024
Period: Nov 1924 - Oct 2024
Period: Nov 1974 - Oct 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 1910 		2.114
May 1911 		5.204
May 1911 		7.704
Jan 1916 		8.674 9.423 10.276 11.632
20 Years
Worst Period (from) 		0.000
Aug 1898 		0.207
Jul 1900 		1.967
May 1901 		3.498
May 1901 		4.601
Apr 1911 		4.899 5.038 5.295 6.625
30 Years
Worst Period (from) 		0.667
Oct 1945 		1.394
May 1940 		2.084
May 1940 		2.773
Nov 1940 		3.435
Jan 1941 		3.687 3.829 4.009 4.711
40 Years
Worst Period (from) 		0.227
Oct 1941 		0.866
Apr 1940 		1.493
Apr 1940 		2.119
Apr 1940 		2.726
Jan 1941 		2.975 3.183 3.439 3.839
50 Years
Worst Period (from) 		1.274
Jun 1934 		1.625
Nov 1940 		1.867
Nov 1940 		2.107
Aug 1939 		2.337
Aug 1939 		2.531 2.771 3.088 3.425
60 Years
Worst Period (from) 		1.687
Mar 1937 		1.822
Feb 1937 		1.949
Aug 1939 		2.065
Aug 1939 		2.181
Aug 1939 		2.345 2.562 2.792 3.204
70 Years
Worst Period (from) 		1.659
May 1911 		1.827
Aug 1939 		1.916
Aug 1939 		2.006
Aug 1939 		2.095
Aug 1939 		2.225 2.426 2.578 3.094
80 Years
Worst Period (from) 		1.697
May 1901 		1.856
May 1901 		1.918
Aug 1939 		1.977
Aug 1939 		2.037
Aug 1939 		2.149 2.339 2.455 2.928
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
Oct 1936 		0.000
Sep 1971 		2.737
Oct 1971 		5.767
Jul 1972 		8.350
Dec 1972 		9.062 9.547 10.180 11.528
20 Years
Worst Period (from) 		0.000
Apr 1960 		0.714
Oct 1961 		2.281
Oct 1961 		3.598
Jan 1940 		4.646
Jan 1941 		4.860 4.993 5.303 6.531
30 Years
Worst Period (from) 		0.667
Oct 1945 		1.394
May 1940 		2.084
May 1940 		2.773
Nov 1940 		3.435
Jan 1941 		3.595 3.804 3.959 4.616
40 Years
Worst Period (from) 		0.227
Oct 1941 		0.866
Apr 1940 		1.493
Apr 1940 		2.119
Apr 1940 		2.726
Jan 1941 		2.851 2.996 3.349 3.752
50 Years
Worst Period (from) 		1.274
Jun 1934 		1.625
Nov 1940 		1.867
Nov 1940 		2.107
Aug 1939 		2.337
Aug 1939 		2.428 2.530 2.751 3.361
60 Years
Worst Period (from) 		1.687
Mar 1937 		1.822
Feb 1937 		1.949
Aug 1939 		2.065
Aug 1939 		2.181
Aug 1939 		2.253 2.317 2.516 3.121
70 Years
Worst Period (from) 		1.737
Aug 1939 		1.827
Aug 1939 		1.916
Aug 1939 		2.006
Aug 1939 		2.095
Aug 1939 		2.146 2.192 2.325 2.956
80 Years
Worst Period (from) 		1.799
Aug 1939 		1.859
Aug 1939 		1.918
Aug 1939 		1.977
Aug 1939 		2.037
Aug 1939 		2.078 2.102 2.160 2.427
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) 		0.090
Nov 2013 		2.881
Nov 2013 		5.672
Nov 2013 		8.088
Jan 1977 		9.645
Jan 1977 		10.373 11.008 11.253 12.094
20 Years
Worst Period (from) 		1.693
Nov 2003 		2.876
Nov 2003 		4.060
Nov 2003 		5.187
Mar 2004 		6.292
Mar 2004 		6.439 6.499 6.636 7.756
30 Years
Worst Period (from) 		3.100
Nov 1993 		3.753
Nov 1993 		4.406
Nov 1993 		5.059
Nov 1993 		5.409
Jan 1977 		5.646 5.736 5.931 6.487
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 20/80 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 October 2024

Withdrawals and Success Rate

If you had implemented a specific Withdrawal Strategy with the US Stocks/Bonds 20/80 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 - Oct 2024
Period: Nov 1924 - Oct 2024
Period: Nov 1974 - Oct 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% Succ.
2.337%
100.00
100% Succ.
2.181%
100.00
100% Succ.
2.095%
100.00
100% Succ.
2.037%
2.50 %
100.00
100.00
100.00
100.00
100% Succ.
2.726%
96.07
95% Succ.
2.531%
91.75
90% Succ.
2.562%
84.51
80% Succ.
2.578%
76.32
50% Succ.
2.928%
3.00 %
100.00
100.00
100.00
100% Succ.
3.435%
94.66
90% Succ.
3.183%
83.16
80% Succ.
3.088%
65.04
50% Succ.
3.204%
53.23
50% Succ.
3.094%
48.93
3.50 %
100.00
100.00
99.06
95% Succ.
3.687%
75.64
50% Succ.
3.839%
45.47
32.65
29.69
32.02
4.00 %
100.00
100.00
80.30
80% Succ.
4.009%
43.67
26.46
23.87
21.75
18.94
4.50 %
100.00
100.00
100% Succ.
4.601%
54.88
50% Succ.
4.711%
33.36
20.21
14.11
11.62
12.06
5.00 %
100.00
91.47
90% Succ.
5.038%
45.93
28.24
11.15
9.32
8.64
9.02
5.50 %
100.00
72.43
39.41
19.02
8.18
6.65
5.56
5.41
6.00 %
100.00
63.85
31.34
13.39
5.61
4.08
3.48
2.82
6.50 %
100.00
53.14
50% Succ.
6.625%
21.92
11.19
3.85
2.04
0.70
0.00
7.00 %
100.00
42.44
13.38
7.17
1.92
0.00
0.00
0.00
7.50 %
100.00
100% Succ.
7.704%
35.35
10.76
4.02
0.00
0.00
0.00
0.00
8.00 %
99.07
26.57
7.13
1.83
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% Succ.
2.337%
100.00
100% Succ.
2.181%
100.00
100% Succ.
2.095%
100.00
100% Succ.
2.037%
2.50 %
100.00
100.00
100.00
100.00
100% Succ.
2.726%
91.85
90% Succ.
2.530%
80.67
80% Succ.
2.516%
61.22
50% Succ.
2.956%
43.15
3.00 %
100.00
100.00
100.00
100% Succ.
3.435%
89.88
80% Succ.
3.349%
73.04
50% Succ.
3.361%
62.79
50% Succ.
3.121%
48.48
35.27
3.50 %
100.00
100.00
98.34
95% Succ.
3.595%
70.18
50% Succ.
3.752%
34.61
11.64
9.14
12.03
4.00 %
100.00
100.00
77.17
35.51
10.82
4.37
0.00
0.00
4.50 %
100.00
100.00
100% Succ.
4.646%
53.39
50% Succ.
4.616%
26.91
4.66
0.00
0.00
0.00
5.00 %
100.00
89.70
80% Succ.
5.303%
40.78
20.53
0.00
0.00
0.00
0.00
5.50 %
100.00
73.26
35.91
11.37
0.00
0.00
0.00
0.00
6.00 %
100.00
64.62
26.16
9.71
0.00
0.00
0.00
0.00
6.50 %
100.00
51.30
50% Succ.
6.531%
15.34
8.32
0.00
0.00
0.00
0.00
7.00 %
100.00
35.38
8.80
4.72
0.00
0.00
0.00
0.00
7.50 %
100.00
30.59
7.25
2.64
0.00
0.00
0.00
0.00
8.00 %
100.00
20.92
3.92
1.11
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
100% Succ.
5.409%
5.50 %
100.00
100.00
99.17
95% Succ.
5.646%
6.00 %
100.00
100.00
100% Succ.
6.292%
78.01
50% Succ.
6.487%
6.50 %
100.00
89.75
80% Succ.
6.636%
49.79
7.00 %
100.00
66.48
30.71
7.50 %
100.00
58.73
50% Succ.
7.756%
25.31
8.00 %
100.00
42.38
13.69
Simulations are calculated with actual returns of US Stocks/Bonds 20/80 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 October 2024

Related Pages

For the US Stocks/Bonds 20/80 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