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

Last Update: 31 October 2024

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

In the period Jan 1871 - Oct 2024, the portfolio granted a 7.63% annualized return, with a -63.17% maximum drawdown.

Key Points

Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.999% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 99.93% of cases, and for 50 years in the 83.96% of cases .

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

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

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

Over the last 30 years (last update: October 2024), the portfolio has returned 8.39% annualized, with a maximum drawdown of -32.38%.

7.681% 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 4.967 12.664 8.14
[ 5.11 ] 		-20.65
Jan 2022 - Sep 2022
20 Years 1 Nov 2004
 31 Oct 2024 4.623 7.385 7.72
[ 5.04 ] 		-32.38
Nov 2007 - Feb 2009
30 Years 1 Nov 1994
 31 Oct 2024 6.234 7.681 8.39
[ 5.72 ] 		-32.38
Nov 2007 - Feb 2009
40 Years 1 Nov 1984
 31 Oct 2024 7.727 8.425 9.39
[ 6.43 ] 		-32.38
Nov 2007 - Feb 2009
50 Years 1 Nov 1974
 31 Oct 2024 6.200 6.533 10.07
[ 6.13 ] 		-32.38
Nov 2007 - Feb 2009
60 Years 1 Nov 1964
 31 Oct 2024 3.392 3.612 8.90
[ 4.77 ] 		-32.38
Nov 2007 - Feb 2009
70 Years 1 Nov 1954
 31 Oct 2024 4.907 5.050 8.99
[ 5.22 ] 		-32.38
Nov 2007 - Feb 2009
80 Years 1 Nov 1944
 31 Oct 2024 4.874 4.956 9.12
[ 5.26 ] 		-32.38
Nov 2007 - Feb 2009
Simulations are calculated with actual returns of US Stocks/Bonds 60/40 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 60/40 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
May 1908 		0.000
Jun 1910 		1.880
Jul 1911 		5.040
Jul 1911 		7.811
Jan 1973 		8.891 9.787 10.793 12.977
20 Years
Worst Period (from) 		0.000
Jan 1901 		0.771
Jul 1901 		2.282
Jul 1901 		3.792
Jul 1901 		4.748
Dec 1968 		5.276 5.561 6.058 7.888
30 Years
Worst Period (from) 		1.731
Jun 1902 		2.395
Jun 1902 		3.058
Jun 1902 		3.669
Jul 1901 		3.999
Dec 1968 		4.320 4.549 4.936 6.338
40 Years
Worst Period (from) 		2.786
Jul 1901 		2.994
Jul 1901 		3.201
Jul 1901 		3.408
Jul 1901 		3.615
Jul 1901 		3.928 4.092 4.399 5.286
50 Years
Worst Period (from) 		2.805
Jul 1901 		2.946
Jul 1901 		3.087
Jul 1901 		3.228
Jul 1901 		3.369
Jul 1901 		3.672 3.829 4.100 4.797
60 Years
Worst Period (from) 		3.028
Jul 1901 		3.084
Jul 1901 		3.140
Jul 1901 		3.195
Jul 1901 		3.251
Jul 1901 		3.633 3.792 4.083 4.722
70 Years
Worst Period (from) 		3.037
Jul 1901 		3.076
Jul 1901 		3.115
Jul 1901 		3.154
Jul 1901 		3.194
Jul 1901 		3.537 3.709 4.021 4.784
80 Years
Worst Period (from) 		2.973
Jul 1901 		3.015
Jul 1901 		3.057
Jul 1901 		3.098
Jul 1901 		3.140
Jul 1901 		3.453 3.631 3.922 4.568
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
Jun 1964 		0.167
Jul 1972 		2.864
Jul 1972 		5.515
Jun 1972 		7.811
Jan 1973 		9.354 9.938 10.790 12.907
20 Years
Worst Period (from) 		0.646
Apr 1962 		1.969
Apr 1962 		3.246
Aug 1964 		4.052
Dec 1968 		4.748
Dec 1968 		5.224 5.585 6.233 7.872
30 Years
Worst Period (from) 		2.793
Feb 1965 		3.138
Feb 1965 		3.483
Feb 1965 		3.783
Nov 1965 		3.999
Dec 1968 		4.298 4.595 5.075 6.620
40 Years
Worst Period (from) 		2.882
Dec 1968 		3.088
Dec 1968 		3.295
Dec 1968 		3.501
Dec 1968 		3.707
Dec 1968 		3.940 4.172 4.512 5.511
50 Years
Worst Period (from) 		3.161
Sep 1929 		3.258
Dec 1968 		3.346
Dec 1968 		3.433
Dec 1968 		3.521
Dec 1968 		3.725 3.843 4.116 4.822
60 Years
Worst Period (from) 		3.364
Mar 1937 		3.421
Mar 1937 		3.477
Mar 1937 		3.533
Mar 1937 		3.590
Mar 1937 		3.852 3.987 4.247 4.901
70 Years
Worst Period (from) 		3.396
Mar 1937 		3.429
Mar 1937 		3.463
Mar 1937 		3.497
Mar 1937 		3.531
Mar 1937 		3.924 4.117 4.397 5.152
80 Years
Worst Period (from) 		3.404
Mar 1937 		3.425
Mar 1937 		3.446
Mar 1937 		3.467
Mar 1937 		3.488
Mar 1937 		3.753 3.936 4.178 4.821
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 1998 		1.258
Mar 1999 		4.362
Mar 1999 		6.887
Sep 2000 		9.242
Sep 2000 		10.380 10.890 11.390 13.680
20 Years
Worst Period (from) 		2.567
Apr 2000 		3.334
Apr 2000 		4.102
Apr 2000 		4.869
Apr 2000 		5.637
Apr 2000 		6.085 6.543 7.452 8.845
30 Years
Worst Period (from) 		5.381
Nov 1993 		5.721
Jan 1977 		5.969
Jan 1977 		6.217
Jan 1977 		6.465
Jan 1977 		6.715 6.998 7.177 7.725
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 60/40 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 60/40 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
100.00
100.00
100.00
2.50 %
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
3.00 %
100.00
100.00
100.00
100.00
100.00
100% Succ.
3.369%
100.00
100% Succ.
3.251%
100.00
100% Succ.
3.194%
100.00
100% Succ.
3.140%
3.50 %
100.00
100.00
100.00
100% Succ.
3.999%
100.00
100% Succ.
3.615%
99.44
95% Succ.
3.672%
98.14
95% Succ.
3.633%
95.73
95% Succ.
3.537%
93.91
90% Succ.
3.631%
4.00 %
100.00
100.00
99.93
95% Succ.
4.320%
92.68
90% Succ.
4.092%
83.96
80% Succ.
4.100%
83.23
80% Succ.
4.083%
81.03
80% Succ.
4.021%
75.76
4.50 %
100.00
100.00
100% Succ.
4.748%
91.46
90% Succ.
4.549%
77.18
62.79
50% Succ.
4.797%
59.01
50% Succ.
4.722%
58.49
50% Succ.
4.784%
52.31
50% Succ.
4.568%
5.00 %
100.00
99.07
95% Succ.
5.276%
78.68
58.16
50% Succ.
5.286%
43.70
42.24
45.48
39.35
5.50 %
100.00
91.41
90% Succ.
5.561%
65.57
45.87
34.00
32.65
33.96
28.07
6.00 %
100.00
80.83
80% Succ.
6.058%
55.82
50% Succ.
6.338%
39.06
24.86
22.63
23.34
22.10
6.50 %
100.00
73.62
47.75
28.38
17.48
16.50
16.39
17.36
7.00 %
100.00
66.77
41.43
21.43
12.75
10.12
9.43
10.03
7.50 %
100.00
100% Succ.
7.811%
59.05
50% Succ.
7.888%
28.92
15.73
7.54
5.15
4.17
3.61
8.00 %
99.77
47.48
19.97
10.61
3.21
2.48
2.38
2.25
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
100.00
100.00
3.00 %
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100% Succ.
3.488%
3.50 %
100.00
100.00
100.00
100% Succ.
3.999%
100.00
100% Succ.
3.707%
100.00
100% Succ.
3.521%
100.00
100% Succ.
3.590%
100.00
100% Succ.
3.531%
99.17
95% Succ.
3.753%
4.00 %
100.00
100.00
99.88
95% Succ.
4.298%
93.76
90% Succ.
4.172%
85.36
80% Succ.
4.116%
88.98
80% Succ.
4.247%
92.24
90% Succ.
4.117%
87.14
80% Succ.
4.178%
4.50 %
100.00
100.00
100% Succ.
4.748%
92.63
90% Succ.
4.595%
80.03
80% Succ.
4.512%
63.56
50% Succ.
4.822%
66.32
50% Succ.
4.901%
76.18
65.98
50% Succ.
4.821%
5.00 %
100.00
98.65
95% Succ.
5.224%
81.93
80% Succ.
5.075%
62.00
43.09
45.32
56.79
50% Succ.
5.152%
40.25
5.50 %
100.00
91.68
90% Succ.
5.585%
69.92
50.07
50% Succ.
5.511%
29.45
32.02
39.61
24.07
6.00 %
100.00
83.98
80% Succ.
6.233%
59.81
39.94
20.13
16.63
17.45
12.86
6.50 %
100.00
75.65
52.56
50% Succ.
6.620%
27.18
8.82
5.61
4.16
4.15
7.00 %
100.00
67.43
44.11
17.61
2.00
0.83
1.11
1.66
7.50 %
100.00
100% Succ.
7.811%
57.44
50% Succ.
7.872%
28.18
11.10
0.67
0.62
0.83
0.83
8.00 %
99.81
47.14
16.17
6.52
0.50
0.42
0.55
0.83
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% Succ.
5.637%
100.00
6.00 %
100.00
96.12
95% Succ.
6.085%
100.00
100% Succ.
6.465%
6.50 %
100.00
90.58
90% Succ.
6.543%
99.59
95% Succ.
6.715%
7.00 %
100.00
85.60
80% Succ.
7.452%
89.63
80% Succ.
7.177%
7.50 %
100.00
78.67
62.24
50% Succ.
7.725%
8.00 %
100.00
69.53
40.66
Simulations are calculated with actual returns of US Stocks/Bonds 60/40 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 60/40 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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