US Stocks/Bonds 50/50 Portfolio: how to retire safely

Last Update: 28 February 2023

The US Stocks/Bonds 50/50 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 50/50 Portfolio. All calculations are made on actual historical series.

Key Points

The US Stocks/Bonds 50/50 Portfolio is allocated for 50% on Stocks.

In the period Jan 1871 - Feb 2023, the portfolio granted a 7.1% annualized return, with a -54.89% maximum drawdown.

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.952% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 99.86% of cases, and for 50 years in the 73.92% of cases

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 50/50 Portfolio

The US Stocks/Bonds 50/50 Portfolio contains 50% Stocks, 50% Bonds.

Weight Asset Class Category
50.00 % Total US Stock Market Stocks
50.00 % Total US Bond Market Fixed Income

Over the last 30 years (last update: February 2023), the portfolio has returned 7.24% annualized, with a maximum drawdown of -26.93%.

6.893% 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?

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 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 4.561 7.982 6.92
[ 4.33 ] 		-26.93
Nov 2007 - Feb 2009
30 Years 1 Mar 1993
 28 Feb 2023 5.120 6.893 7.24
[ 4.63 ] 		-26.93
Nov 2007 - Feb 2009
40 Years 1 Mar 1983
 28 Feb 2023 6.790 7.644 8.62
[ 5.63 ] 		-26.93
Nov 2007 - Feb 2009
50 Years 1 Mar 1973
 28 Feb 2023 3.681 4.122 8.72
[ 4.57 ] 		-26.93
Nov 2007 - Feb 2009
60 Years 1 Mar 1963
 28 Feb 2023 3.578 3.878 8.41
[ 4.36 ] 		-26.93
Nov 2007 - Feb 2009
70 Years 1 Mar 1953
 28 Feb 2023 4.791 4.987 8.42
[ 4.73 ] 		-26.93
Nov 2007 - Feb 2009
Simulations are calculated with actual returns of US Stocks/Bonds 50/50 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 January 2023

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 50/50 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. 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.

Period: Jan 1871 - Feb 2023
Swipe left to see all data
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
Jun 1900 		0.715
Jul 1901 		2.225
Jul 1901 		3.736
Jul 1901 		4.811
Dec 1968 		5.234 5.475 5.955 7.619
30 Years
Worst Period (from) 		1.778
Jun 1902 		2.402
Jun 1902 		3.025
Jun 1902 		3.556
Jul 1901 		3.952
Jul 1901 		4.228 4.441 4.767 5.955
40 Years
Worst Period (from) 		2.570
Mar 1937 		2.885
Mar 1937 		3.100
Jul 1901 		3.313
Jul 1901 		3.526
Jul 1901 		3.821 3.964 4.206 4.913
50 Years
Worst Period (from) 		2.621
Jul 1901 		2.783
Jul 1901 		2.944
Jul 1901 		3.106
Jul 1901 		3.267
Jul 1901 		3.556 3.686 3.900 4.441
60 Years
Worst Period (from) 		2.842
Jul 1901 		2.914
Jul 1901 		2.986
Jul 1901 		3.058
Jul 1901 		3.130
Jul 1901 		3.457 3.620 3.831 4.371
70 Years
Worst Period (from) 		2.846
Jul 1901 		2.898
Jul 1901 		2.951
Jul 1901 		3.004
Jul 1901 		3.057
Jul 1901 		3.325 3.494 3.716 4.320
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Mar 1923 - Feb 2023
Swipe left to see all data
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) 		0.368
Oct 1961 		1.746
Apr 1962 		3.092
Apr 1962 		4.091
Nov 1965 		4.811
Dec 1968 		5.186 5.541 6.144 7.582
30 Years
Worst Period (from) 		2.654
Feb 1965 		3.014
Feb 1965 		3.373
Feb 1965 		3.713
Nov 1965 		4.022
Dec 1968 		4.243 4.488 4.894 6.113
40 Years
Worst Period (from) 		2.570
Mar 1937 		2.885
Mar 1937 		3.200
Mar 1937 		3.494
Dec 1968 		3.702
Nov 1965 		3.857 4.043 4.269 5.024
50 Years
Worst Period (from) 		2.866
Feb 1937 		3.010
Feb 1937 		3.153
Mar 1937 		3.296
Mar 1937 		3.438
Mar 1937 		3.607 3.708 3.903 4.431
60 Years
Worst Period (from) 		3.004
Mar 1937 		3.075
Mar 1937 		3.146
Mar 1937 		3.216
Mar 1937 		3.287
Mar 1937 		3.678 3.751 3.990 4.451
70 Years
Worst Period (from) 		3.047
Mar 1937 		3.090
Mar 1937 		3.133
Mar 1937 		3.176
Mar 1937 		3.219
Mar 1937 		3.578 3.670 3.944 4.549
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Mar 1973 - Feb 2023
Swipe left to see all data
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) 		2.663
Apr 2000 		3.461
Apr 2000 		4.260
Apr 2000 		4.906
Mar 1973 		5.475
Mar 1973 		6.079 6.367 7.082 8.628
30 Years
Worst Period (from) 		3.550
Mar 1973 		3.844
Mar 1973 		4.139
Mar 1973 		4.434
Mar 1973 		4.729
Mar 1973 		5.592 6.384 6.786 7.432
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 50/50 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 January 2023

Withdrawals and Success Rate

If you had implemented a specific Withdrawal Strategy with the US Stocks/Bonds 50/50 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 - Feb 2023
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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
100.00
3.00 %
100.00
100.00
100.00
100.00
100% Succ.
3.267%
100.00
100% Succ.
3.130%
100.00
100% Succ.
3.057%
3.50 %
100.00
100.00
100% Succ.
3.952%
100.00
100% Succ.
3.526%
97.39
95% Succ.
3.556%
93.68
90% Succ.
3.620%
89.87
80% Succ.
3.716%
4.00 %
100.00
99.86
95% Succ.
4.228%
88.86
80% Succ.
4.206%
73.92
50% Succ.
4.441%
69.29
50% Succ.
4.371%
63.63
50% Succ.
4.320%
4.50 %
100.00
100% Succ.
4.811%
87.32
80% Succ.
4.767%
65.26
50% Succ.
4.913%
47.92
45.08
43.77
5.00 %
98.68
95% Succ.
5.234%
71.30
47.74
34.07
35.05
33.43
5.50 %
89.48
80% Succ.
5.955%
58.08
50% Succ.
5.955%
38.23
23.31
21.50
21.28
6.00 %
78.83
49.15
28.06
16.14
15.81
15.91
6.50 %
70.70
40.76
20.04
12.88
10.75
10.13
7.00 %
62.38
32.11
15.66
8.48
6.68
5.78
7.50 %
52.17
50% Succ.
7.619%
21.13
11.66
5.05
2.62
1.52
8.00 %
42.66
14.79
7.50
1.63
0.72
0.30
Period: Mar 1923 - Feb 2023
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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
100.00
3.00 %
100.00
100.00
100.00
100.00
100% Succ.
3.438%
100.00
100% Succ.
3.287%
100.00
100% Succ.
3.219%
3.50 %
100.00
100.00
100.00
100% Succ.
3.702%
99.33
95% Succ.
3.607%
98.13
95% Succ.
3.678%
96.40
95% Succ.
3.578%
4.00 %
100.00
100.00
100% Succ.
4.022%
90.98
90% Succ.
4.043%
74.21
50% Succ.
4.431%
79.63
50% Succ.
4.451%
75.90
4.50 %
100.00
100% Succ.
4.811%
89.42
80% Succ.
4.894%
69.63
47.25
47.40
51.52
50% Succ.
4.549%
5.00 %
98.34
95% Succ.
5.186%
76.46
50.62
50% Succ.
5.024%
30.28
33.26
34.07
5.50 %
90.32
90% Succ.
5.541%
61.47
38.83
16.47
15.38
16.07
6.00 %
82.93
80% Succ.
6.144%
52.68
50% Succ.
6.113%
25.10
8.49
6.65
6.09
6.50 %
73.36
43.52
16.50
3.83
2.49
1.39
7.00 %
62.64
30.92
10.96
1.50
0.42
0.55
7.50 %
51.20
50% Succ.
7.582%
18.55
6.93
0.33
0.00
0.00
8.00 %
42.66
11.30
3.61
0.00
0.00
0.00
Period: Mar 1973 - Feb 2023
Swipe left to see all data
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.
4.729%
5.00 %
100.00
100% Succ.
5.475%
98.76
5.50 %
99.72
95.44
95% Succ.
5.592%
6.00 %
96.68
95% Succ.
6.079%
94.19
90% Succ.
6.384%
6.50 %
87.81
87.55
80% Succ.
6.786%
7.00 %
80.89
80% Succ.
7.082%
72.61
50% Succ.
7.432%
7.50 %
73.96
46.47
8.00 %
64.27
31.95
Simulations are calculated with actual returns of US Stocks/Bonds 50/50 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 January 2023

Related Pages

For the US Stocks/Bonds 50/50 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

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