Last Update: 31 October 2024
The US Stocks/Bonds 80/20 Portfolio invests in 2 asset classes and is allocated for 80% on Stocks.
In the period Jan 1871 - Oct 2024, the portfolio granted a 8.46% annualized return, with a -75.88% maximum drawdown.
Key Points
Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.731% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 99.8% of cases, and for 50 years in the 90.06% of cases .
In this post we will find out the most affordable withdrawal strategies for the US Stocks/Bonds 80/20 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 80/20 Portfolio
The US Stocks/Bonds 80/20 Portfolio contains 80% Stocks, 20% Bonds.
| Weight | Asset Class | Category |
|---|---|---|
| 80.00 % | Total US Stock Market | Stocks |
| 20.00 % | Total US Bond Market | Fixed Income |
Over the last 30 years (last update: October 2024), the portfolio has returned 9.53% annualized, with a maximum drawdown of -42.23%.
8.306% 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?
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 | 6.774 | 13.548 |
10.27 [ 7.18 ] |
-22.73 Jan 2022 - Sep 2022 |
| 20 Years |
1 Nov 2004 |
31 Oct 2024 | 5.538 | 7.761 |
9.16 [ 6.45 ] |
-42.23 Nov 2007 - Feb 2009 |
| 30 Years |
1 Nov 1994 |
31 Oct 2024 | 7.164 | 8.306 |
9.53 [ 6.84 ] |
-42.23 Nov 2007 - Feb 2009 |
| 40 Years |
1 Nov 1984 |
31 Oct 2024 | 8.591 | 9.111 |
10.41 [ 7.42 ] |
-42.23 Nov 2007 - Feb 2009 |
| 50 Years |
1 Nov 1974 |
31 Oct 2024 | 7.130 | 7.364 |
11.11 [ 7.14 ] |
-42.23 Nov 2007 - Feb 2009 |
| 60 Years |
1 Nov 1964 |
31 Oct 2024 | 3.673 | 3.825 |
9.68 [ 5.52 ] |
-42.23 Nov 2007 - Feb 2009 |
| 70 Years |
1 Nov 1954 |
31 Oct 2024 | 6.124 | 6.218 |
9.98 [ 6.18 ] |
-42.23 Nov 2007 - Feb 2009 |
| 80 Years |
1 Nov 1944 |
31 Oct 2024 | 6.496 | 6.541 |
10.31 [ 6.41 ] |
-42.23 Nov 2007 - Feb 2009 |
Simulations are calculated with actual returns of US Stocks/Bonds 80/20 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 80/20 Portfolio?
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):
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
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.
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 1908 |
0.000 Jun 1910 |
1.675 Jul 1911 |
4.901 Jul 1911 |
7.252 Sep 1929 |
8.686 | 9.408 | 10.733 | 13.503 | |
|
20 Years Worst Period (from) |
0.000 May 1901 |
0.844 Jul 1901 |
2.359 Jul 1901 |
3.578 Sep 1929 |
4.422 Sep 1929 |
5.249 | 5.555 | 6.127 | 8.498 | ||
|
30 Years Worst Period (from) |
1.509 Jun 1902 |
2.277 Jun 1902 |
3.045 Jun 1902 |
3.531 Sep 1929 |
3.731 Sep 1929 |
4.416 | 4.634 | 5.131 | 6.982 | ||
|
40 Years Worst Period (from) |
2.873 Dec 1968 |
3.070 Dec 1968 |
3.267 Dec 1968 |
3.406 Sep 1929 |
3.519 Sep 1929 |
4.053 | 4.207 | 4.640 | 5.926 | ||
|
50 Years Worst Period (from) |
2.901 Sep 1929 |
3.014 Sep 1929 |
3.127 Sep 1929 |
3.240 Sep 1929 |
3.354 Sep 1929 |
3.823 | 4.001 | 4.356 | 5.412 | ||
|
60 Years Worst Period (from) |
3.072 Sep 1929 |
3.115 Sep 1929 |
3.159 Sep 1929 |
3.202 Sep 1929 |
3.245 Sep 1929 |
3.841 | 4.041 | 4.450 | 5.407 | ||
|
70 Years Worst Period (from) |
3.144 Sep 1929 |
3.159 Sep 1929 |
3.174 Sep 1929 |
3.189 Sep 1929 |
3.205 Sep 1929 |
3.771 | 3.963 | 4.423 | 5.563 | ||
|
80 Years Worst Period (from) |
3.118 Sep 1929 |
3.134 Sep 1929 |
3.151 Sep 1929 |
3.168 Sep 1929 |
3.184 Sep 1929 |
3.696 | 3.879 | 4.307 | 5.232 | ||
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 |
0.000 Oct 1964 |
2.667 Aug 1972 |
5.283 Jun 1972 |
7.252 Sep 1929 |
8.772 | 9.489 | 10.638 | 13.491 | |
|
20 Years Worst Period (from) |
1.046 Sep 1929 |
1.890 Sep 1929 |
2.734 Sep 1929 |
3.578 Sep 1929 |
4.422 Sep 1929 |
5.177 | 5.477 | 6.246 | 8.499 | ||
|
30 Years Worst Period (from) |
2.931 Sep 1929 |
3.131 Sep 1929 |
3.331 Sep 1929 |
3.531 Sep 1929 |
3.731 Sep 1929 |
4.334 | 4.609 | 5.228 | 7.447 | ||
|
40 Years Worst Period (from) |
2.873 Dec 1968 |
3.070 Dec 1968 |
3.267 Dec 1968 |
3.406 Sep 1929 |
3.519 Sep 1929 |
4.044 | 4.217 | 4.665 | 6.385 | ||
|
50 Years Worst Period (from) |
2.901 Sep 1929 |
3.014 Sep 1929 |
3.127 Sep 1929 |
3.240 Sep 1929 |
3.354 Sep 1929 |
3.816 | 3.983 | 4.312 | 5.534 | ||
|
60 Years Worst Period (from) |
3.072 Sep 1929 |
3.115 Sep 1929 |
3.159 Sep 1929 |
3.202 Sep 1929 |
3.245 Sep 1929 |
4.054 | 4.278 | 4.703 | 5.860 | ||
|
70 Years Worst Period (from) |
3.144 Sep 1929 |
3.159 Sep 1929 |
3.174 Sep 1929 |
3.189 Sep 1929 |
3.205 Sep 1929 |
4.089 | 4.431 | 5.182 | 6.503 | ||
|
80 Years Worst Period (from) |
3.118 Sep 1929 |
3.134 Sep 1929 |
3.151 Sep 1929 |
3.168 Sep 1929 |
3.184 Sep 1929 |
3.827 | 4.212 | 4.658 | 5.923 | ||
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 Nov 1998 |
0.000 Mar 1999 |
3.105 Mar 1999 |
5.878 Sep 2000 |
8.357 Sep 2000 |
9.884 | 10.701 | 11.415 | 14.270 | |
|
20 Years Worst Period (from) |
2.318 Apr 2000 |
3.031 Apr 2000 |
3.744 Apr 2000 |
4.457 Apr 2000 |
5.170 Apr 2000 |
5.798 | 6.426 | 7.761 | 9.359 | ||
|
30 Years Worst Period (from) |
5.740 Sep 1987 |
6.027 Sep 1987 |
6.315 Sep 1987 |
6.603 Sep 1987 |
6.891 Sep 1987 |
7.149 | 7.441 | 7.712 | 8.334 | ||
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 80/20 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 80/20 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.
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. 3.354% |
100.00
|
100% Succ. 3.245% |
100.00
|
100% Succ. 3.205% |
100.00
|
100% Succ. 3.184% |
||||
| 3.50 % |
100.00
|
100.00
|
100.00
|
100% Succ. 3.731% |
100.00
|
100% Succ. 3.519% |
99.76
|
95% Succ. 3.823% |
99.47
|
95% Succ. 3.841% |
99.30
|
95% Succ. 3.771% |
98.76
|
95% Succ. 3.696% |
||
| 4.00 % |
100.00
|
100.00
|
100% Succ. 4.422% |
99.80
|
95% Succ. 4.416% |
95.98
|
95% Succ. 4.053% |
90.06
|
90% Succ. 4.001% |
90.86
|
90% Succ. 4.041% |
89.37
|
80% Succ. 4.423% |
87.03
|
80% Succ. 4.307% |
|
| 4.50 % |
100.00
|
99.94
|
93.34
|
90% Succ. 4.634% |
82.96
|
80% Succ. 4.640% |
76.26
|
78.44
|
77.95
|
74.30
|
||||||
| 5.00 % |
100.00
|
98.57
|
95% Succ. 5.249% |
82.25
|
80% Succ. 5.131% |
72.49
|
62.47
|
50% Succ. 5.412% |
62.73
|
50% Succ. 5.407% |
63.85
|
57.50
|
50% Succ. 5.232% |
|||
| 5.50 % |
100.00
|
91.23
|
90% Succ. 5.555% |
74.51
|
59.77
|
50% Succ. 5.926% |
47.63
|
48.18
|
51.34
|
50% Succ. 5.563% |
44.76
|
|||||
| 6.00 % |
100.00
|
81.89
|
80% Succ. 6.127% |
66.38
|
49.23
|
39.29
|
39.57
|
42.50
|
35.29
|
|||||||
| 6.50 % |
100.00
|
75.79
|
56.69
|
50% Succ. 6.982% |
42.28
|
31.60
|
33.01
|
35.65
|
29.20
|
|||||||
| 7.00 % |
100.00
|
100% Succ. 7.252% |
71.31
|
49.70
|
35.41
|
26.78
|
26.71
|
28.40
|
21.98
|
|||||||
| 7.50 % |
99.88
|
64.84
|
43.04
|
28.75
|
19.57
|
18.37
|
16.88
|
13.19
|
||||||||
| 8.00 % |
99.31
|
57.81
|
34.30
|
21.65
|
11.87
|
8.96
|
9.43
|
7.22
|
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. 3.354% |
100.00
|
100% Succ. 3.245% |
100.00
|
100% Succ. 3.205% |
100.00
|
100% Succ. 3.184% |
||||
| 3.50 % |
100.00
|
100.00
|
100.00
|
100% Succ. 3.731% |
100.00
|
100% Succ. 3.519% |
99.50
|
95% Succ. 3.816% |
99.38
|
99.17
|
98.76
|
95% Succ. 3.827% |
||||
| 4.00 % |
100.00
|
100.00
|
100% Succ. 4.422% |
99.64
|
95% Succ. 4.334% |
95.84
|
95% Succ. 4.044% |
89.35
|
80% Succ. 4.312% |
95.63
|
95% Succ. 4.054% |
95.84
|
95% Succ. 4.089% |
92.95
|
90% Succ. 4.212% |
|
| 4.50 % |
100.00
|
99.90
|
91.80
|
90% Succ. 4.609% |
83.77
|
80% Succ. 4.665% |
74.88
|
84.20
|
80% Succ. 4.703% |
89.20
|
83.40
|
80% Succ. 4.658% |
||||
| 5.00 % |
100.00
|
97.71
|
95% Succ. 5.177% |
83.23
|
80% Succ. 5.228% |
74.06
|
62.90
|
72.97
|
83.93
|
80% Succ. 5.182% |
75.52
|
|||||
| 5.50 % |
100.00
|
89.39
|
76.81
|
64.36
|
51.08
|
50% Succ. 5.534% |
58.84
|
50% Succ. 5.860% |
73.13
|
61.00
|
50% Succ. 5.923% |
|||||
| 6.00 % |
100.00
|
82.52
|
80% Succ. 6.246% |
69.68
|
56.31
|
50% Succ. 6.385% |
41.93
|
47.61
|
61.77
|
47.30
|
||||||
| 6.50 % |
100.00
|
76.59
|
62.90
|
48.40
|
33.61
|
39.09
|
50.14
|
50% Succ. 6.503% |
33.61
|
|||||||
| 7.00 % |
100.00
|
100% Succ. 7.252% |
71.90
|
56.96
|
50% Succ. 7.447% |
40.78
|
26.12
|
27.86
|
34.90
|
16.18
|
||||||
| 7.50 % |
99.81
|
64.41
|
48.87
|
30.79
|
16.14
|
16.84
|
18.56
|
10.37
|
||||||||
| 8.00 % |
98.98
|
57.86
|
38.29
|
22.05
|
9.82
|
9.15
|
11.36
|
7.05
|
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% Succ. 5.170% |
100.00
|
||
| 5.50 % |
100.00
|
97.78
|
95% Succ. 5.798% |
100.00
|
||
| 6.00 % |
100.00
|
93.07
|
90% Succ. 6.426% |
100.00
|
||
| 6.50 % |
100.00
|
89.47
|
100.00
|
100% Succ. 6.891% |
||
| 7.00 % |
100.00
|
85.60
|
98.76
|
95% Succ. 7.149% |
||
| 7.50 % |
100.00
|
81.99
|
80% Succ. 7.761% |
87.97
|
80% Succ. 7.712% |
|
| 8.00 % |
100.00
|
75.35
|
66.39
|
Simulations are calculated with actual returns of US Stocks/Bonds 80/20 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 80/20 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
