Last Update: 30 November 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 - Nov 2024, the portfolio granted a 5.65% 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Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.435% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 80.31% of cases, and for 50 years in the 26.52% 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: November 2024), the portfolio has returned 5.93% annualized, with a maximum drawdown of -16.54%.
6.305% has been a safe withdrawal rate.
Let's consider different timeframes, all ending at November 2024: which Withdrawal Rates could you have applied without running out of money in your retirement?
Timeframes ending at Nov 2024 |
Withdrawal Rate (%) |
Investment Performances |
||||
---|---|---|---|---|---|---|
Timeframe | Period from | Period to | Perpetual | Safe | Ann.Return(%) [ Infl.Adj. ] |
Max Drawdown(%) |
10 Years |
1 Dec 2014 |
30 Nov 2024 | 0.882 | 10.639 |
3.84 [ 0.87 ] |
-16.54 Jan 2022 - Sep 2022 |
20 Years |
1 Dec 2004 |
30 Nov 2024 | 2.153 | 6.357 |
4.69 [ 2.09 ] |
-16.54 Jan 2022 - Sep 2022 |
30 Years |
1 Dec 1994 |
30 Nov 2024 | 3.946 | 6.305 |
5.93 [ 3.33 ] |
-16.54 Jan 2022 - Sep 2022 |
40 Years |
1 Dec 1984 |
30 Nov 2024 | 5.413 | 6.721 |
7.08 [ 4.18 ] |
-16.54 Jan 2022 - Sep 2022 |
50 Years |
1 Dec 1974 |
30 Nov 2024 | 4.114 | 4.831 |
7.73 [ 3.89 ] |
-16.54 Jan 2022 - Sep 2022 |
60 Years |
1 Dec 1964 |
30 Nov 2024 | 2.515 | 3.014 |
7.09 [ 3.04 ] |
-16.54 Jan 2022 - Sep 2022 |
70 Years |
1 Dec 1954 |
30 Nov 2024 | 2.644 | 3.008 |
6.76 [ 3.06 ] |
-16.54 Jan 2022 - Sep 2022 |
80 Years |
1 Dec 1944 |
30 Nov 2024 | 2.133 | 2.407 |
6.52 [ 2.76 ] |
-16.54 Jan 2022 - Sep 2022 |
Withdrawal Rates Simulation (updated at Nov 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?
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 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.
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 | 4.712 | ||
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 | 3.841 | ||
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 | 3.430 | ||
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 | 2.452 | 2.928 |
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 | 11.523 | |
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 | 6.528 | ||
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 | 2.426 |
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 |
6.435 | 6.492 | 6.634 | 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 | 5.948 | 6.487 |
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.
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% |
91.76
|
90% Succ. 2.562% |
84.52
|
80% Succ. 2.578% |
76.24
|
50% Succ. 2.928% |
|||
3.00 % |
100.00
|
100.00
|
100.00
|
100% Succ. 3.435% |
94.66
|
90% Succ. 3.183% |
83.17
|
80% Succ. 3.088% |
65.07
|
50% Succ. 3.204% |
53.27
|
50% Succ. 3.094% |
48.87
|
|||
3.50 % |
100.00
|
100.00
|
99.06
|
95% Succ. 3.687% |
75.66
|
50% Succ. 3.841% |
45.51
|
32.62
|
29.66
|
31.98
|
||||||
4.00 % |
100.00
|
100.00
|
80.31
|
80% Succ. 4.009% |
43.71
|
26.52
|
23.85
|
21.73
|
18.92
|
|||||||
4.50 % |
100.00
|
100.00
|
100% Succ. 4.601% |
54.91
|
50% Succ. 4.712% |
33.41
|
20.27
|
14.10
|
11.61
|
12.05
|
||||||
5.00 % |
100.00
|
91.48
|
90% Succ. 5.038% |
45.97
|
28.29
|
11.14
|
9.31
|
8.63
|
9.01
|
|||||||
5.50 % |
100.00
|
72.45
|
39.45
|
19.08
|
8.17
|
6.65
|
5.56
|
5.41
|
||||||||
6.00 % |
100.00
|
63.87
|
31.38
|
13.45
|
5.61
|
4.08
|
3.47
|
2.82
|
||||||||
6.50 % |
100.00
|
53.11
|
50% Succ. 6.625% |
21.91
|
11.26
|
3.85
|
2.04
|
0.69
|
0.00
|
|||||||
7.00 % |
100.00
|
42.41
|
13.37
|
7.16
|
1.92
|
0.00
|
0.00
|
0.00
|
||||||||
7.50 % |
100.00
|
100% Succ. 7.704% |
35.32
|
10.75
|
4.02
|
0.00
|
0.00
|
0.00
|
0.00
|
|||||||
8.00 % |
99.07
|
26.55
|
7.12
|
1.83
|
0.00
|
0.00
|
0.00
|
0.00
|
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% |
42.74
|
||||
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
|
34.85
|
||||
3.50 % |
100.00
|
100.00
|
98.34
|
95% Succ. 3.595% |
70.18
|
50% Succ. 3.752% |
34.61
|
11.43
|
8.86
|
11.62
|
||||||
4.00 % |
100.00
|
100.00
|
77.17
|
35.51
|
10.82
|
4.16
|
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
|
11.51
|
0.00
|
0.00
|
0.00
|
0.00
|
||||||||
6.00 % |
100.00
|
64.62
|
26.16
|
9.85
|
0.00
|
0.00
|
0.00
|
0.00
|
||||||||
6.50 % |
100.00
|
51.20
|
50% Succ. 6.528% |
15.22
|
8.46
|
0.00
|
0.00
|
0.00
|
0.00
|
|||||||
7.00 % |
100.00
|
35.28
|
8.80
|
4.72
|
0.00
|
0.00
|
0.00
|
0.00
|
||||||||
7.50 % |
100.00
|
30.49
|
7.25
|
2.64
|
0.00
|
0.00
|
0.00
|
0.00
|
||||||||
8.00 % |
100.00
|
20.81
|
3.92
|
1.11
|
0.00
|
0.00
|
0.00
|
0.00
|
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% |
78.42
|
50% Succ. 6.487% |
|
6.50 % |
100.00
|
89.47
|
80% Succ. 6.634% |
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
|
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