Retired in › 1937

Retiring in 1937: did the 4% rule survive?

Retiring at the start of 1937 with $1M and spending $40,000 a year adjusted for inflation (the 4% rule), a 100% stock portfolio lasted all 30 years, with $1.2M left; a 60/40 portfolio lasted all 30 years, with $359k left.

The 1937–38 recession brought a second sharp drop during the Depression.

Over the first 10 years, stocks returned -0.3% a year after inflation and the 60/40 mix -0.3%. The first decade matters most: losses early, while withdrawals continue, are what break a plan.

The highest fixed rate that lasted 30 years from 1937 was 4.5% with all stocks and 4.25% with 60/40 (tested in 0.25% steps from 3% to 6%).

← 1936 · 1938 → · The 4% rule over 30 years · All start years

Questions

What happened if you retired in 1937 with the 4% rule?

Retiring at the start of 1937 with $1M and spending $40,000 a year adjusted for inflation (the 4% rule), a 100% stock portfolio lasted all 30 years, with $1.2M left; a 60/40 portfolio lasted all 30 years, with $359k left.

What was a safe withdrawal rate for someone retiring in 1937?

The highest fixed rate that lasted 30 years from 1937 was 4.5% with all stocks and 4.25% with 60/40 (tested in 0.25% steps from 3% to 6%).