Last Update: 28 February 2023
The US Stocks/Bonds 40/60 Portfolio invests in 2 asset classes and can be suitable for a retirement plan.
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: February 2023), the portfolio has returned 6.68% annualized, with a maximum drawdown of -21.12%.
6.561% has been a safe withdrawal rate.
Let's consider different timeframes, all ending at February 2023: which Withdrawal Rates could you have applied without running out of money in your retirement?
Timeframes ending at Feb 2023 |
Withdrawal Rate (%) |
Investment Performances |
||||
---|---|---|---|---|---|---|
Timeframe | Period from | Period to | Perpetual | Safe | Ann.Return(%) [ Infl.Adj. ] |
Max Drawdown(%) |
20 Years |
1 Mar 2003 |
28 Feb 2023 | 3.823 | 7.572 |
6.15 [ 3.58 ] |
-21.12 Nov 2007 - Feb 2009 |
30 Years |
1 Mar 1993 |
28 Feb 2023 | 4.591 | 6.561 |
6.68 [ 4.09 ] |
-21.12 Nov 2007 - Feb 2009 |
40 Years |
1 Mar 1983 |
28 Feb 2023 | 6.323 | 7.304 |
8.13 [ 5.15 ] |
-21.12 Nov 2007 - Feb 2009 |
50 Years |
1 Mar 1973 |
28 Feb 2023 | 3.509 | 4.031 |
8.30 [ 4.17 ] |
-21.12 Nov 2007 - Feb 2009 |
60 Years |
1 Mar 1963 |
28 Feb 2023 | 3.275 | 3.634 |
7.97 [ 3.93 ] |
-21.12 Nov 2007 - Feb 2009 |
70 Years |
1 Mar 1953 |
28 Feb 2023 | 4.127 | 4.371 |
7.88 [ 4.21 ] |
-21.12 Nov 2007 - Feb 2009 |
Withdrawal Rates Simulation (updated at Feb 2023)
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?
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. 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
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 | 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 Jan 1899 |
0.644 Jul 1901 |
2.157 Jul 1901 |
3.670 Jul 1901 |
4.823 Jul 1911 |
5.175 | 5.377 | 5.741 | 7.330 | |
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 | 4.293 | 4.523 | 5.602 | ||
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 |
3.690 | 3.787 | 3.948 | 4.566 | ||
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 | 3.626 | 4.078 | ||
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 |
3.190 | 3.314 | 3.508 | 3.960 | ||
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 |
3.088 | 3.181 | 3.352 | 3.886 |
PWR (%) - Perpetual Withdrawal Rate
|
SWR (%) - Safe Withdrawal Rate
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Preserved Capital | 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 Oct 1961 |
1.441 Oct 1961 |
2.875 Apr 1962 |
4.026 May 1965 |
4.845 Sep 1968 |
5.162 | 5.462 | 5.882 | 7.224 | |
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 | 3.553 | 3.928 | ||
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 |
PWR (%) - Perpetual Withdrawal Rate
|
SWR (%) - Safe Withdrawal Rate
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Preserved Capital | 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) |
2.736 Apr 2000 |
3.569 Apr 2000 |
4.292 Mar 1973 |
4.881 Mar 1973 |
5.471 Mar 1973 |
6.221 | 6.411 | 6.950 | 8.319 | |
30 Years Worst Period (from) |
3.456 Mar 1973 |
3.762 Mar 1973 |
4.068 Mar 1973 |
4.374 Mar 1973 |
4.680 Mar 1973 |
5.426 | 6.147 | 6.519 | 7.103 |
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.
Withdrawal Rate |
20 Years
|
30 Years
|
40 Years
|
50 Years
|
60 Years
|
70 Years
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
% 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
|
||||||
2.50 % |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
100% Succ. 2.950% |
100.00
|
100% Succ. 2.873% |
||||
3.00 % |
100.00
|
100.00
|
100.00
|
100% Succ. 3.423% |
100.00
|
100% Succ. 3.114% |
99.55
|
95% Succ. 3.190% |
98.48
|
95% Succ. 3.088% |
||
3.50 % |
100.00
|
100.00
|
100% Succ. 3.851% |
99.85
|
95% Succ. 3.690% |
88.59
|
80% Succ. 3.626% |
80.49
|
80% Succ. 3.508% |
69.71
|
50% Succ. 3.886% |
|
4.00 % |
100.00
|
99.05
|
95% Succ. 4.124% |
77.65
|
53.79
|
50% Succ. 4.078% |
48.69
|
46.61
|
||||
4.50 % |
100.00
|
100% Succ. 4.823% |
81.19
|
80% Succ. 4.523% |
52.41
|
50% Succ. 4.566% |
35.94
|
32.25
|
31.91
|
|||
5.00 % |
97.98
|
95% Succ. 5.175% |
60.94
|
37.34
|
23.55
|
22.04
|
20.77
|
|||||
5.50 % |
86.52
|
80% Succ. 5.741% |
51.81
|
50% Succ. 5.602% |
29.47
|
16.95
|
15.18
|
14.69
|
||||
6.00 % |
74.80
|
40.76
|
21.60
|
13.20
|
10.39
|
9.93
|
||||||
6.50 % |
66.86
|
33.06
|
15.96
|
8.72
|
7.23
|
6.59
|
||||||
7.00 % |
56.14
|
50% Succ. 7.330% |
24.61
|
11.80
|
5.62
|
3.70
|
1.93
|
|||||
7.50 % |
46.69
|
16.43
|
9.06
|
2.61
|
0.45
|
0.00
|
||||||
8.00 % |
38.69
|
12.27
|
5.42
|
0.33
|
0.00
|
0.00
|
Withdrawal Rate |
20 Years
|
30 Years
|
40 Years
|
50 Years
|
60 Years
|
70 Years
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
% 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
|
||||||
2.50 % |
100.00
|
100.00
|
100.00
|
100.00
|
100.00
|
100% Succ. 2.950% |
100.00
|
100% Succ. 2.873% |
||||
3.00 % |
100.00
|
100.00
|
100.00
|
100.00
|
100% Succ. 3.114% |
99.38
|
95% Succ. 3.196% |
98.34
|
95% Succ. 3.090% |
|||
3.50 % |
100.00
|
100.00
|
100% Succ. 3.962% |
100.00
|
100% Succ. 3.539% |
87.35
|
80% Succ. 3.607% |
82.95
|
80% Succ. 3.553% |
75.35
|
50% Succ. 3.998% |
|
4.00 % |
100.00
|
99.41
|
95% Succ. 4.164% |
78.22
|
51.41
|
50% Succ. 4.018% |
47.19
|
49.86
|
||||
4.50 % |
100.00
|
100% Succ. 4.845% |
83.35
|
80% Succ. 4.594% |
52.43
|
50% Succ. 4.570% |
29.95
|
24.74
|
23.82
|
|||
5.00 % |
97.81
|
95% Succ. 5.162% |
64.92
|
35.78
|
11.48
|
11.43
|
12.19
|
|||||
5.50 % |
89.28
|
80% Succ. 5.882% |
52.32
|
50% Succ. 5.684% |
23.99
|
8.32
|
5.20
|
4.16
|
||||
6.00 % |
78.15
|
40.67
|
17.20
|
3.83
|
1.04
|
0.00
|
||||||
6.50 % |
68.68
|
30.92
|
10.82
|
0.50
|
0.00
|
0.00
|
||||||
7.00 % |
55.57
|
50% Succ. 7.224% |
21.64
|
6.80
|
0.00
|
0.00
|
0.00
|
|||||
7.50 % |
45.68
|
12.60
|
4.72
|
0.00
|
0.00
|
0.00
|
||||||
8.00 % |
38.29
|
8.44
|
2.77
|
0.00
|
0.00
|
0.00
|
Withdrawal Rate |
20 Years
|
30 Years
|
||
---|---|---|---|---|
% Success | Percentile | % Success | Percentile | |
2.00 % |
100.00
|
100.00
|
||
2.50 % |
100.00
|
100.00
|
||
3.00 % |
100.00
|
100.00
|
||
3.50 % |
100.00
|
100.00
|
||
4.00 % |
100.00
|
100.00
|
||
4.50 % |
100.00
|
100.00
|
100% Succ. 4.680% |
|
5.00 % |
100.00
|
100% Succ. 5.471% |
97.10
|
95% Succ. 5.426% |
5.50 % |
99.72
|
94.61
|
||
6.00 % |
97.51
|
95% Succ. 6.221% |
92.95
|
90% Succ. 6.147% |
6.50 % |
88.64
|
80% Succ. 6.950% |
80.50
|
80% Succ. 6.519% |
7.00 % |
79.50
|
55.19
|
50% Succ. 7.103% |
|
7.50 % |
69.25
|
36.10
|
||
8.00 % |
60.11
|
27.39
|
Related Pages
For the US Stocks/Bonds 40/60 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