Last Update: 31 October 2024
The Warren Buffett Portfolio invests in 2 asset classes and is allocated for 90% on Stocks.
In the period Jan 1871 - Oct 2024, the portfolio granted a 8.82% annualized return, with a -79.59% maximum drawdown.
Key Points
Worst case scenario so far, over a 30-year time horizon, you could have withdrawn 3.237% of your initial capital each year, kept withdrawing all the time (adjusting for inflation), and you wouldn't have run out of money before 30 years.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 97.31% of cases, and for 50 years in the 89.41% of cases .
In this post we will find out the most affordable withdrawal strategies for the Warren Buffett 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 Warren Buffett Portfolio
The Warren Buffett Portfolio contains 90% Stocks, 10% Bonds.
| Weight | Asset Class | Category |
|---|---|---|
| 90.00 % | US Large Cap | Stocks |
| 10.00 % | US Short Term (1-3y) Treasuries | Fixed Income |
Over the last 30 years (last update: October 2024), the portfolio has returned 9.94% annualized, with a maximum drawdown of -46.52%.
8.448% 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 | 7.934 | 14.069 |
11.79 [ 8.65 ] |
-22.06 Jan 2022 - Sep 2022 |
| 20 Years |
1 Nov 2004 |
31 Oct 2024 | 5.599 | 7.559 |
9.71 [ 6.98 ] |
-46.52 Nov 2007 - Feb 2009 |
| 30 Years |
1 Nov 1994 |
31 Oct 2024 | 7.410 | 8.448 |
9.94 [ 7.24 ] |
-46.52 Nov 2007 - Feb 2009 |
| 40 Years |
1 Nov 1984 |
31 Oct 2024 | 9.297 | 9.755 |
10.95 [ 7.94 ] |
-46.52 Nov 2007 - Feb 2009 |
| 50 Years |
1 Nov 1974 |
31 Oct 2024 | 6.955 | 7.156 |
11.39 [ 7.41 ] |
-46.52 Nov 2007 - Feb 2009 |
| 60 Years |
1 Nov 1964 |
31 Oct 2024 | 3.421 | 3.554 |
9.78 [ 5.62 ] |
-46.52 Nov 2007 - Feb 2009 |
| 70 Years |
1 Nov 1954 |
31 Oct 2024 | 6.483 | 6.566 |
10.26 [ 6.44 ] |
-46.52 Nov 2007 - Feb 2009 |
| 80 Years |
1 Nov 1944 |
31 Oct 2024 | 7.353 | 7.389 |
10.77 [ 6.86 ] |
-46.52 Nov 2007 - Feb 2009 |
Simulations are calculated with actual returns of Warren Buffett 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 Warren Buffett 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 |
1.554 Mar 1999 |
4.501 Sep 1929 |
6.411 Sep 1929 |
8.417 | 9.067 | 10.408 | 13.694 | |
|
20 Years Worst Period (from) |
0.000 May 1901 |
0.968 Jul 1901 |
2.053 Sep 1929 |
2.920 Sep 1929 |
3.787 Sep 1929 |
4.963 | 5.370 | 6.062 | 8.651 | ||
|
30 Years Worst Period (from) |
1.785 Jun 1902 |
2.526 Jun 1902 |
2.906 Sep 1929 |
3.071 Sep 1929 |
3.237 Sep 1929 |
4.248 | 4.630 | 5.148 | 7.142 | ||
|
40 Years Worst Period (from) |
2.687 Dec 1968 |
2.803 Sep 1929 |
2.897 Sep 1929 |
2.990 Sep 1929 |
3.084 Sep 1929 |
3.923 | 4.211 | 4.599 | 6.223 | ||
|
50 Years Worst Period (from) |
2.534 Sep 1929 |
2.640 Sep 1929 |
2.746 Sep 1929 |
2.852 Sep 1929 |
2.958 Sep 1929 |
3.720 | 3.984 | 4.322 | 5.694 | ||
|
60 Years Worst Period (from) |
2.717 Sep 1929 |
2.755 Sep 1929 |
2.793 Sep 1929 |
2.831 Sep 1929 |
2.869 Sep 1929 |
3.887 | 4.090 | 4.561 | 5.733 | ||
|
70 Years Worst Period (from) |
2.792 Sep 1929 |
2.804 Sep 1929 |
2.815 Sep 1929 |
2.827 Sep 1929 |
2.838 Sep 1929 |
3.873 | 4.075 | 4.628 | 5.851 | ||
|
80 Years Worst Period (from) |
2.763 Sep 1929 |
2.778 Sep 1929 |
2.793 Sep 1929 |
2.808 Sep 1929 |
2.823 Sep 1929 |
3.803 | 4.008 | 4.464 | 5.601 | ||
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 Apr 1928 |
0.000 Oct 1964 |
1.554 Mar 1999 |
4.501 Sep 1929 |
6.411 Sep 1929 |
8.203 | 8.966 | 10.241 | 13.624 | |
|
20 Years Worst Period (from) |
0.319 Sep 1929 |
1.186 Sep 1929 |
2.053 Sep 1929 |
2.920 Sep 1929 |
3.787 Sep 1929 |
4.799 | 5.021 | 5.853 | 8.550 | ||
|
30 Years Worst Period (from) |
2.575 Sep 1929 |
2.741 Sep 1929 |
2.906 Sep 1929 |
3.071 Sep 1929 |
3.237 Sep 1929 |
4.019 | 4.354 | 4.962 | 7.620 | ||
|
40 Years Worst Period (from) |
2.687 Dec 1968 |
2.803 Sep 1929 |
2.897 Sep 1929 |
2.990 Sep 1929 |
3.084 Sep 1929 |
3.733 | 3.975 | 4.475 | 6.447 | ||
|
50 Years Worst Period (from) |
2.534 Sep 1929 |
2.640 Sep 1929 |
2.746 Sep 1929 |
2.852 Sep 1929 |
2.958 Sep 1929 |
3.544 | 3.727 | 4.144 | 5.654 | ||
|
60 Years Worst Period (from) |
2.717 Sep 1929 |
2.755 Sep 1929 |
2.793 Sep 1929 |
2.831 Sep 1929 |
2.869 Sep 1929 |
3.761 | 4.102 | 4.616 | 6.134 | ||
|
70 Years Worst Period (from) |
2.792 Sep 1929 |
2.804 Sep 1929 |
2.815 Sep 1929 |
2.827 Sep 1929 |
2.838 Sep 1929 |
3.829 | 4.354 | 5.263 | 6.951 | ||
|
80 Years Worst Period (from) |
2.763 Sep 1929 |
2.778 Sep 1929 |
2.793 Sep 1929 |
2.808 Sep 1929 |
2.823 Sep 1929 |
3.538 | 4.018 | 4.618 | 6.145 | ||
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 Jan 1999 |
1.554 Mar 1999 |
4.900 Sep 2000 |
7.584 Sep 2000 |
9.020 | 10.143 | 10.858 | 14.575 | |
|
20 Years Worst Period (from) |
1.814 Apr 2000 |
2.522 Apr 2000 |
3.230 Apr 2000 |
3.937 Apr 2000 |
4.645 Apr 2000 |
5.098 | 5.853 | 7.411 | 9.664 | ||
|
30 Years Worst Period (from) |
5.735 Sep 1987 |
5.991 Apr 1976 |
6.203 Apr 1976 |
6.415 Apr 1976 |
6.627 Apr 1976 |
6.901 | 7.335 | 7.890 | 8.557 | ||
Legend:
SWR 100% Success
95% Success
90% Success
PWR 100% Capital Protection
75%
50% Protection
25%
Simulations are calculated with actual returns of Warren Buffett 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 Warren Buffett 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% Succ. 2.958% |
100.00
|
100% Succ. 2.869% |
100.00
|
100% Succ. 2.838% |
100.00
|
100% Succ. 2.823% |
||||
| 3.00 % |
100.00
|
100.00
|
100.00
|
100% Succ. 3.237% |
100.00
|
100% Succ. 3.084% |
99.92
|
99.82
|
99.80
|
99.77
|
||||||
| 3.50 % |
100.00
|
100.00
|
100% Succ. 3.787% |
99.87
|
99.63
|
95% Succ. 3.923% |
98.72
|
95% Succ. 3.720% |
99.02
|
95% Succ. 3.887% |
98.81
|
95% Succ. 3.873% |
98.65
|
95% Succ. 3.803% |
||
| 4.00 % |
100.00
|
99.88
|
97.31
|
95% Succ. 4.248% |
93.56
|
90% Succ. 4.211% |
89.41
|
80% Succ. 4.322% |
92.90
|
90% Succ. 4.090% |
92.45
|
90% Succ. 4.075% |
90.42
|
90% Succ. 4.008% |
||
| 4.50 % |
100.00
|
99.25
|
95% Succ. 4.963% |
91.80
|
90% Succ. 4.630% |
82.44
|
80% Succ. 4.599% |
76.82
|
80.83
|
80% Succ. 4.561% |
82.22
|
80% Succ. 4.628% |
79.48
|
|||
| 5.00 % |
100.00
|
94.40
|
90% Succ. 5.370% |
82.04
|
80% Succ. 5.148% |
73.08
|
65.92
|
68.50
|
71.50
|
66.97
|
||||||
| 5.50 % |
100.00
|
88.30
|
74.24
|
63.72
|
53.97
|
50% Succ. 5.694% |
55.19
|
50% Succ. 5.733% |
58.69
|
50% Succ. 5.851% |
52.31
|
50% Succ. 5.601% |
||||
| 6.00 % |
100.00
|
100% Succ. 6.411% |
81.02
|
80% Succ. 6.062% |
67.92
|
54.43
|
50% Succ. 6.223% |
43.30
|
44.10
|
47.96
|
41.04
|
|||||
| 6.50 % |
99.94
|
74.55
|
61.20
|
44.77
|
36.41
|
37.98
|
40.71
|
33.26
|
||||||||
| 7.00 % |
99.83
|
70.63
|
52.25
|
50% Succ. 7.142% |
38.70
|
30.95
|
32.39
|
35.25
|
28.41
|
|||||||
| 7.50 % |
99.48
|
64.53
|
45.33
|
33.36
|
26.30
|
27.33
|
28.50
|
21.20
|
||||||||
| 8.00 % |
97.92
|
58.56
|
39.27
|
28.31
|
19.89
|
16.68
|
16.78
|
10.82
|
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% Succ. 2.958% |
100.00
|
100% Succ. 2.869% |
100.00
|
100% Succ. 2.838% |
100.00
|
100% Succ. 2.823% |
||||
| 3.00 % |
100.00
|
100.00
|
100.00
|
100% Succ. 3.237% |
100.00
|
100% Succ. 3.084% |
99.83
|
99.58
|
99.45
|
99.17
|
||||||
| 3.50 % |
100.00
|
100.00
|
100% Succ. 3.787% |
99.76
|
99.31
|
95% Succ. 3.733% |
97.34
|
95% Succ. 3.544% |
97.71
|
95% Succ. 3.761% |
96.68
|
95% Succ. 3.829% |
95.02
|
95% Succ. 3.538% |
||
| 4.00 % |
100.00
|
99.79
|
95.24
|
95% Succ. 4.019% |
89.60
|
80% Succ. 4.475% |
84.03
|
80% Succ. 4.144% |
92.72
|
90% Succ. 4.102% |
93.91
|
90% Succ. 4.354% |
90.46
|
90% Succ. 4.018% |
||
| 4.50 % |
100.00
|
98.75
|
95% Succ. 4.799% |
87.87
|
80% Succ. 4.962% |
79.33
|
71.21
|
81.50
|
80% Succ. 4.616% |
87.53
|
81.33
|
80% Succ. 4.618% |
||||
| 5.00 % |
100.00
|
90.63
|
90% Succ. 5.021% |
79.67
|
71.29
|
60.40
|
70.06
|
82.27
|
80% Succ. 5.263% |
73.44
|
||||||
| 5.50 % |
100.00
|
83.25
|
80% Succ. 5.853% |
73.72
|
62.69
|
52.08
|
50% Succ. 5.654% |
61.54
|
77.01
|
64.32
|
||||||
| 6.00 % |
100.00
|
100% Succ. 6.411% |
78.56
|
68.13
|
58.11
|
50% Succ. 6.447% |
44.93
|
51.77
|
50% Succ. 6.134% |
67.87
|
53.53
|
50% Succ. 6.145% |
||||
| 6.50 % |
99.91
|
73.36
|
63.50
|
49.51
|
38.44
|
45.53
|
59.00
|
50% Succ. 6.951% |
41.91
|
|||||||
| 7.00 % |
99.72
|
69.41
|
57.19
|
43.41
|
32.95
|
38.25
|
49.03
|
30.71
|
||||||||
| 7.50 % |
99.17
|
62.33
|
51.25
|
50% Succ. 7.620% |
37.86
|
26.12
|
30.35
|
37.67
|
18.26
|
|||||||
| 8.00 % |
96.67
|
56.71
|
44.59
|
30.79
|
19.80
|
21.21
|
26.32
|
10.79
|
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% Succ. 4.645% |
100.00
|
||
| 5.00 % |
100.00
|
96.12
|
95% Succ. 5.098% |
100.00
|
||
| 5.50 % |
100.00
|
92.80
|
90% Succ. 5.853% |
100.00
|
||
| 6.00 % |
100.00
|
89.20
|
100.00
|
|||
| 6.50 % |
100.00
|
85.87
|
100.00
|
100% Succ. 6.627% |
||
| 7.00 % |
100.00
|
83.38
|
80% Succ. 7.411% |
93.78
|
90% Succ. 7.335% |
|
| 7.50 % |
100.00
|
100% Succ. 7.584% |
77.84
|
87.14
|
80% Succ. 7.890% |
|
| 8.00 % |
98.54
|
70.36
|
74.69
|
Simulations are calculated with actual returns of Warren Buffett 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 Warren Buffett 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
