Retired in › 1966

Retiring in 1966: did the 4% rule survive?

Retiring at the start of 1966 with $1M and spending $40,000 a year adjusted for inflation (the 4% rule), a 100% stock portfolio ran out in year 26, in 1991; a 60/40 portfolio ran out in year 25, in 1990.

It began a long stretch of rising inflation and flat real stock prices that lasted into the early 1980s.

Over the first 10 years, stocks returned -1.9% a year after inflation and the 60/40 mix -1.5%. The first decade matters most: losses early, while withdrawals continue, are what break a plan.

The highest fixed rate that lasted 30 years from 1966 was 3.5% with either all stocks or 60/40 (tested in 0.25% steps from 3% to 6%).

← 1965 · 1967 → · The 4% rule over 30 years · All start years

Questions

What happened if you retired in 1966 with the 4% rule?

Retiring at the start of 1966 with $1M and spending $40,000 a year adjusted for inflation (the 4% rule), a 100% stock portfolio ran out in year 26, in 1991; a 60/40 portfolio ran out in year 25, in 1990.

What was a safe withdrawal rate for someone retiring in 1966?

The highest fixed rate that lasted 30 years from 1966 was 3.5% with either all stocks or 60/40 (tested in 0.25% steps from 3% to 6%).