Retired in › 1885

Retiring in 1885: did the 4% rule survive?

Retiring at the start of 1885 with $1M and spending $40,000 a year adjusted for inflation (the 4% rule), a 100% stock portfolio lasted all 30 years, with $2.8M left; a 60/40 portfolio lasted all 30 years, with $1.8M left.

Over the first 10 years, stocks returned 7.1% a year after inflation and the 60/40 mix 6.9%. The first decade matters most: losses early, while withdrawals continue, are what break a plan.

The highest fixed rate that lasted 30 years from 1885 was at least 6% with either all stocks or 60/40 (tested in 0.25% steps from 3% to 6%).

← 1884 · 1886 → · The 4% rule over 30 years · All start years

Questions

What happened if you retired in 1885 with the 4% rule?

Retiring at the start of 1885 with $1M and spending $40,000 a year adjusted for inflation (the 4% rule), a 100% stock portfolio lasted all 30 years, with $2.8M left; a 60/40 portfolio lasted all 30 years, with $1.8M left.

What was a safe withdrawal rate for someone retiring in 1885?

The highest fixed rate that lasted 30 years from 1885 was at least 6% with either all stocks or 60/40 (tested in 0.25% steps from 3% to 6%).