US Stocks/Bonds 80/20 Portfolio: how to retire safely

Last Update: 31 January 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 - Jan 2024, the portfolio granted a 8.41% 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Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.731% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 89.98% 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: January 2024), the portfolio has returned 8.98% annualized, with a maximum drawdown of -42.23%.

7.609% has been a safe withdrawal rate.

Let's consider different timeframes, all ending at January 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 Jan 2024
Withdrawal Rate (%)
Investment Performances
Timeframe Period from Period to Perpetual Safe Ann.Return(%)
[ Infl.Adj. ]
Max
Drawdown(%)
20 Years 1 Feb 2004
31 Jan 2024 4.997 7.401 8.52
[ 5.78 ]
-42.23
Nov 2007 - Feb 2009
30 Years 1 Feb 1994
31 Jan 2024 6.393 7.609 8.98
[ 6.30 ]
-42.23
Nov 2007 - Feb 2009
40 Years 1 Feb 1984
31 Jan 2024 8.090 8.638 10.15
[ 7.14 ]
-42.23
Nov 2007 - Feb 2009
50 Years 1 Feb 1974
31 Jan 2024 5.030 5.282 10.37
[ 6.28 ]
-42.23
Nov 2007 - Feb 2009
60 Years 1 Feb 1964
31 Jan 2024 3.911 4.076 9.61
[ 5.49 ]
-42.23
Nov 2007 - Feb 2009
70 Years 1 Feb 1954
31 Jan 2024 7.033 7.133 10.06
[ 6.29 ]
-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 January 2024

Withdrawal Rates Simulation (updated at Jan 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?

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 - Jan 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 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
5.247 5.553 6.125 8.513
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
4.412 4.632 5.116 6.958
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
4.047 4.207 4.638 5.910
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
3.822 4.000 4.337 5.404
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
3.842 4.066 4.471 5.425
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
3.770 3.959 4.421 5.544
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Feb 1924 - Jan 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 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 8.588
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 5.538
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
4.156 4.356 4.756 5.944
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 6.541
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Period: Feb 1974 - Jan 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 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 7.768 9.373
30 Years
Worst Period (from)
5.030
Feb 1974
5.246
Feb 1974
5.462
Feb 1974
5.679
Feb 1974
5.895
Feb 1974
7.034 7.207 7.665 8.310
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 January 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.

Period: Jan 1871 - Jan 2024
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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.
3.354%
100.00
100% Succ.
3.245%
100.00
100% Succ.
3.205%
3.50 %
100.00
100.00
100% Succ.
3.731%
100.00
100% Succ.
3.519%
99.76
95% Succ.
3.822%
99.46
95% Succ.
3.842%
99.30
95% Succ.
3.770%
4.00 %
100.00
100% Succ.
4.422%
99.80
95% Succ.
4.412%
95.95
95% Succ.
4.047%
89.98
80% Succ.
4.337%
91.41
90% Succ.
4.066%
89.28
80% Succ.
4.421%
4.50 %
99.94
93.30
90% Succ.
4.632%
82.84
80% Succ.
4.638%
76.09
79.07
77.76
5.00 %
98.56
95% Succ.
5.247%
82.14
80% Succ.
5.116%
72.31
62.20
50% Succ.
5.404%
63.24
50% Succ.
5.425%
63.53
5.50 %
91.18
90% Succ.
5.553%
74.36
59.50
50% Succ.
5.910%
47.33
48.57
50.90
50% Succ.
5.544%
6.00 %
81.79
80% Succ.
6.125%
66.17
48.90
39.10
39.89
41.98
6.50 %
75.66
56.43
50% Succ.
6.958%
41.90
31.50
33.27
35.47
7.00 %
71.15
49.39
34.98
26.74
26.92
28.56
7.50 %
64.77
42.69
28.28
19.63
18.52
17.03
8.00 %
58.14
33.96
21.13
11.87
9.03
9.52
Period: Feb 1924 - Jan 2024
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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.
3.354%
100.00
100% Succ.
3.245%
100.00
100% Succ.
3.205%
3.50 %
100.00
100.00
100% Succ.
3.731%
100.00
100% Succ.
3.519%
99.50
95% Succ.
3.816%
99.38
99.17
4.00 %
100.00
100% Succ.
4.422%
99.64
95% Succ.
4.334%
95.84
95% Succ.
4.044%
89.35
80% Succ.
4.312%
97.09
95% Succ.
4.156%
95.84
95% Succ.
4.089%
4.50 %
99.90
91.80
90% Succ.
4.609%
83.77
80% Succ.
4.665%
74.88
86.07
80% Succ.
4.756%
89.20
5.00 %
97.71
95% Succ.
5.177%
83.23
80% Succ.
5.228%
74.06
62.90
74.84
83.93
80% Succ.
5.182%
5.50 %
89.39
76.81
64.36
51.25
50% Succ.
5.538%
60.71
50% Succ.
5.944%
73.13
6.00 %
82.52
80% Succ.
6.246%
69.68
56.31
50% Succ.
6.385%
42.43
49.48
61.77
6.50 %
76.59
62.90
48.40
34.44
40.96
51.25
50% Succ.
6.541%
7.00 %
71.90
56.96
50% Succ.
7.447%
40.78
27.12
29.73
37.12
7.50 %
64.62
48.87
30.79
17.47
18.30
20.22
8.00 %
58.79
38.41
21.91
10.48
9.15
11.36
Period: Feb 1974 - Jan 2024
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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
5.00 %
100.00
100% Succ.
5.170%
100.00
5.50 %
97.78
95% Succ.
5.798%
100.00
100% Succ.
5.895%
6.00 %
93.07
90% Succ.
6.426%
99.17
6.50 %
89.47
98.76
7.00 %
84.76
96.68
95% Succ.
7.034%
7.50 %
81.44
80% Succ.
7.768%
85.48
80% Succ.
7.665%
8.00 %
76.18
63.90
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 January 2024

Related Pages

For the US Stocks/Bonds 80/20 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