Retired in › 1929

Retiring in 1929: did the 4% rule survive?

Retiring at the start of 1929 with $1M and spending $40,000 a year adjusted for inflation (the 4% rule), a 100% stock portfolio ran out in year 26, in 1954; a 60/40 portfolio lasted all 30 years, with $716k left.

Retirees that year met the 1929 crash and the Great Depression that followed.

Over the first 10 years, stocks returned 0.8% a year after inflation and the 60/40 mix 4.2%. The first decade matters most: losses early, while withdrawals continue, are what break a plan.

The highest fixed rate that lasted 30 years from 1929 was 3.75% with all stocks and 4.75% with 60/40 (tested in 0.25% steps from 3% to 6%).

← 1928 · 1930 → · The 4% rule over 30 years · All start years

Questions

What happened if you retired in 1929 with the 4% rule?

Retiring at the start of 1929 with $1M and spending $40,000 a year adjusted for inflation (the 4% rule), a 100% stock portfolio ran out in year 26, in 1954; a 60/40 portfolio lasted all 30 years, with $716k left.

What was a safe withdrawal rate for someone retiring in 1929?

The highest fixed rate that lasted 30 years from 1929 was 3.75% with all stocks and 4.75% with 60/40 (tested in 0.25% steps from 3% to 6%).