US Stocks/Bonds 40/60 Portfolio: how to retire safely

Last Update: 31 March 2024

The US Stocks/Bonds 40/60 Portfolio invests in 2 asset classes and is allocated for 40% on Stocks.

In the period Jan 1871 - Mar 2024, the portfolio granted a 6.68% annualized return, with a -45.05% maximum drawdown.

Key Points

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.851% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 99.05% of cases, and for 50 years in the 54.27% of cases .

In this post we will find out the most affordable withdrawal strategies for the US Stocks/Bonds 40/60 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 40/60 Portfolio

The US Stocks/Bonds 40/60 Portfolio contains 40% Stocks, 60% Bonds.

Weight Asset Class Category
40.00 % Total US Stock Market Stocks
60.00 % Total US Bond Market Fixed Income

Over the last 30 years (last update: March 2024), the portfolio has returned 7.05% annualized, with a maximum drawdown of -21.12%.

6.82% has been a safe withdrawal rate.

Let's consider different timeframes, all ending at March 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
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Timeframes ending at Mar 2024
Withdrawal Rate (%)
Investment Performances
Timeframe Period from Period to Perpetual Safe Ann.Return(%)
[ Infl.Adj. ]		 Max
Drawdown(%)
10 Years 1 Apr 2014
 31 Mar 2024 3.122 12.150 5.93
[ 3.01 ] 		-18.59
Jan 2022 - Sep 2022
20 Years 1 Apr 2004
 31 Mar 2024 3.244 6.767 5.99
[ 3.32 ] 		-21.12
Nov 2007 - Feb 2009
30 Years 1 Apr 1994
 31 Mar 2024 4.945 6.820 7.05
[ 4.40 ] 		-21.12
Nov 2007 - Feb 2009
40 Years 1 Apr 1984
 31 Mar 2024 6.852 7.811 8.36
[ 5.38 ] 		-21.12
Nov 2007 - Feb 2009
50 Years 1 Apr 1974
 31 Mar 2024 4.322 4.814 8.67
[ 4.67 ] 		-21.12
Nov 2007 - Feb 2009
60 Years 1 Apr 1964
 31 Mar 2024 3.093 3.430 8.03
[ 3.95 ] 		-21.12
Nov 2007 - Feb 2009
70 Years 1 Apr 1954
 31 Mar 2024 3.994 4.225 7.96
[ 4.24 ] 		-21.12
Nov 2007 - Feb 2009
80 Years 1 Apr 1944
 31 Mar 2024 3.456 3.610 7.84
[ 4.02 ] 		-21.12
Nov 2007 - Feb 2009
Simulations are calculated with actual returns of US Stocks/Bonds 40/60 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 March 2024

Withdrawal Rates Simulation (updated at Mar 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 40/60 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 - Mar 2024
Period: Apr 1924 - Mar 2024
Period: Apr 1974 - Mar 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
Apr 1908 		0.000
Mar 1910 		2.040
Jul 1911 		5.144
Jul 1911 		7.824
Dec 1915 		8.887 9.756 10.580 12.417
20 Years
Worst Period (from) 		0.000
Jan 1899 		0.644
Jul 1901 		2.157
Jul 1901 		3.670
Jul 1901 		4.823
Jul 1911 		5.178 5.377 5.742 7.300
30 Years
Worst Period (from) 		1.544
Jul 1890 		2.379
Jun 1902 		2.969
Jun 1902 		3.429
May 1901 		3.851
Jul 1901 		4.124 4.295 4.525 5.635
40 Years
Worst Period (from) 		1.846
Apr 1940 		2.316
Apr 1940 		2.785
Apr 1940 		3.172
Mar 1937 		3.423
Jul 1901 		3.691 3.788 3.948 4.572
50 Years
Worst Period (from) 		2.397
Jul 1901 		2.585
Jul 1901 		2.770
Feb 1937 		2.942
Feb 1937 		3.114
Mar 1937 		3.368 3.473 3.628 4.086
60 Years
Worst Period (from) 		2.597
Mar 1937 		2.685
Mar 1937 		2.773
Mar 1937 		2.862
Mar 1937 		2.950
Mar 1937 		3.192 3.314 3.503 3.948
70 Years
Worst Period (from) 		2.572
Jul 1911 		2.678
Jul 1901 		2.750
Jul 1901 		2.819
Mar 1937 		2.873
Mar 1937 		3.090 3.187 3.358 3.910
80 Years
Worst Period (from) 		2.488
Jul 1901 		2.568
Jul 1901 		2.648
Jul 1901 		2.728
Jul 1901 		2.808
Jul 1901 		3.000 3.083 3.242 3.747
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
Dec 1936 		0.199
Oct 1971 		2.957
Jul 1972 		5.679
Jun 1972 		8.111
Jan 1973 		9.408 9.890 10.580 12.388
20 Years
Worst Period (from) 		0.000
Oct 1961 		1.441
Oct 1961 		2.875
Apr 1962 		4.026
May 1965 		4.845
Sep 1968 		5.162 5.462 5.882 7.179
30 Years
Worst Period (from) 		2.116
Feb 1946 		2.681
Feb 1946 		3.246
Feb 1946 		3.622
May 1965 		3.962
Nov 1965 		4.164 4.334 4.594 5.684
40 Years
Worst Period (from) 		1.846
Apr 1940 		2.316
Apr 1940 		2.785
Apr 1940 		3.172
Mar 1937 		3.539
Mar 1937 		3.719 3.787 3.948 4.570
50 Years
Worst Period (from) 		2.424
Feb 1937 		2.597
Feb 1937 		2.770
Feb 1937 		2.942
Feb 1937 		3.114
Mar 1937 		3.381 3.468 3.607 4.018
60 Years
Worst Period (from) 		2.597
Mar 1937 		2.685
Mar 1937 		2.773
Mar 1937 		2.862
Mar 1937 		2.950
Mar 1937 		3.196 3.310 3.519 3.899
70 Years
Worst Period (from) 		2.655
Mar 1937 		2.710
Mar 1937 		2.764
Mar 1937 		2.819
Mar 1937 		2.873
Mar 1937 		3.090 3.169 3.393 3.998
80 Years
Worst Period (from) 		2.673
Feb 1937 		2.710
Feb 1937 		2.746
Feb 1937 		2.783
Mar 1937 		2.819
Mar 1937 		3.014 3.059 3.203 3.711
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
Mar 1999 		2.683
Mar 1999 		5.413
Feb 1999 		7.826
Apr 1974 		9.879
Apr 1974 		10.555 10.877 11.296 12.885
20 Years
Worst Period (from) 		2.736
Apr 2000 		3.569
Apr 2000 		4.402
Apr 2000 		5.234
Apr 2000 		6.067
Apr 2000 		6.313 6.578 7.073 8.319
30 Years
Worst Period (from) 		4.324
Nov 1993 		4.771
Apr 1974 		5.045
Apr 1974 		5.319
Apr 1974 		5.593
Apr 1974 		6.149 6.383 6.561 7.103
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 40/60 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 March 2024

Withdrawals and Success Rate

If you had implemented a specific Withdrawal Strategy with the US Stocks/Bonds 40/60 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 - Mar 2024
Period: Apr 1924 - Mar 2024
Period: Apr 1974 - Mar 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
100.00
100.00
100.00
2.50 %
100.00
100.00
100.00
100.00
100.00
100.00
100% Succ.
2.950%
100.00
100% Succ.
2.873%
100.00
100% Succ.
2.808%
3.00 %
100.00
100.00
100.00
100.00
100% Succ.
3.423%
100.00
100% Succ.
3.114%
99.55
95% Succ.
3.192%
98.50
95% Succ.
3.090%
95.00
95% Succ.
3.000%
3.50 %
100.00
100.00
100.00
100% Succ.
3.851%
99.85
95% Succ.
3.691%
88.71
80% Succ.
3.628%
80.27
80% Succ.
3.503%
70.10
50% Succ.
3.910%
61.59
50% Succ.
3.747%
4.00 %
100.00
100.00
99.05
95% Succ.
4.124%
77.87
54.27
50% Succ.
4.086%
48.13
47.30
41.25
4.50 %
100.00
100.00
100% Succ.
4.823%
81.35
80% Succ.
4.525%
52.87
50% Succ.
4.572%
35.97
31.88
32.00
32.05
5.00 %
100.00
98.00
95% Succ.
5.178%
61.28
37.94
23.31
21.79
20.50
21.48
5.50 %
100.00
86.63
80% Succ.
5.742%
52.23
50% Succ.
5.635%
30.15
16.77
15.00
14.50
15.00
6.00 %
100.00
75.00
41.28
22.35
13.06
10.27
9.80
10.45
6.50 %
100.00
67.13
33.24
16.76
8.63
7.14
6.50
6.48
7.00 %
100.00
56.13
50% Succ.
7.300%
24.39
12.65
5.56
3.66
1.90
1.02
7.50 %
100.00
100% Succ.
7.824%
46.38
16.28
9.19
2.58
0.45
0.00
0.00
8.00 %
99.65
38.38
12.16
5.37
0.32
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
100.00
100.00
100.00
2.50 %
100.00
100.00
100.00
100.00
100.00
100.00
100% Succ.
2.950%
100.00
100% Succ.
2.873%
100.00
100% Succ.
2.819%
3.00 %
100.00
100.00
100.00
100.00
100.00
100% Succ.
3.114%
99.38
95% Succ.
3.196%
98.34
95% Succ.
3.090%
95.44
95% Succ.
3.014%
3.50 %
100.00
100.00
100.00
100% Succ.
3.962%
100.00
100% Succ.
3.539%
87.35
80% Succ.
3.607%
81.91
80% Succ.
3.519%
75.35
50% Succ.
3.998%
66.80
50% Succ.
3.711%
4.00 %
100.00
100.00
99.41
95% Succ.
4.164%
78.22
51.41
50% Succ.
4.018%
44.49
49.86
35.68
4.50 %
100.00
100.00
100% Succ.
4.845%
83.35
80% Succ.
4.594%
52.43
50% Succ.
4.570%
28.62
22.04
21.61
20.75
5.00 %
100.00
97.81
95% Succ.
5.162%
64.92
35.78
9.32
8.73
8.59
11.62
5.50 %
100.00
89.28
80% Succ.
5.882%
52.32
50% Succ.
5.684%
23.99
6.16
2.49
1.39
1.66
6.00 %
100.00
78.15
40.67
17.20
1.66
0.00
0.00
0.00
6.50 %
100.00
68.68
30.20
10.96
0.00
0.00
0.00
0.00
7.00 %
100.00
54.94
50% Succ.
7.179%
20.10
7.77
0.00
0.00
0.00
0.00
7.50 %
100.00
44.43
11.30
5.13
0.00
0.00
0.00
0.00
8.00 %
100.00
36.94
8.09
2.77
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
5.50 %
100.00
100.00
100.00
100% Succ.
5.593%
6.00 %
100.00
100.00
100% Succ.
6.067%
98.34
95% Succ.
6.149%
6.50 %
100.00
92.24
90% Succ.
6.578%
83.40
80% Succ.
6.561%
7.00 %
100.00
81.44
80% Succ.
7.073%
55.19
50% Succ.
7.103%
7.50 %
100.00
69.53
36.10
8.00 %
100.00
60.11
27.39
Simulations are calculated with actual returns of US Stocks/Bonds 40/60 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 March 2024

Related Pages

For the US Stocks/Bonds 40/60 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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