FIRE.PipedHQ

Withdrawal rates › 30 years

Is 5.25% a safe withdrawal rate for 30 years?

A 5.25% withdrawal ($53k a year from $1M, raised with inflation) lasted 30 years in 66.1% of start years since 1871 with a 60/40 portfolio, and 79% with 100% stocks.

It lasted only about half the time or a little more: the money ran out in 42 of 124 start years from 1871 to 1994. Failures clustered in start years 1898–1899, 1901–1914, 1916–1917, 1929–1930, 1936–1937 and 1939–1940, among others.

The worst start was 1966, when the money ran out in year 17. Among the start years that lasted, 1900 came closest, finishing with $24k.

In 39% of start years the portfolio ended above the $1M it started with, after inflation. The median ending balance was $524k.

Cutting spending by 20% whenever the portfolio sat more than 20% below its real high raised success to 88.7%. Holding two years of spending in cash and drawing on it after down years lowered it to 61.3%.

Of the four mixes, 100% stocks lasted most often, at 79%.

1871: lasted, $3.8M left18711872: lasted, $3.8M left1873: lasted, $3.6M left1874: lasted, $3.3M left1875: lasted, $3.2M left1876: lasted, $3.0M left1877: lasted, $3.8M left1878: lasted, $2.5M left1879: lasted, $1.9M left1880: lasted, $1.7M left18801881: lasted, $882k left1882: lasted, $1.4M left1883: lasted, $1.3M left1884: lasted, $1.2M left1885: lasted, $1.1M left1886: lasted, $610k left1887: lasted, $448k left1888: lasted, $534k left1889: lasted, $385k left1890: lasted, $217k left18901891: lasted, $358k left1892: lasted, $100k left1893: lasted, $260k left1894: lasted, $242k left1895: lasted, $137k left1896: lasted, $179k left1897: lasted, $98k left1898: ran out in year 291899: ran out in year 241900: lasted, $24k left19001901: ran out in year 251902: ran out in year 231903: ran out in year 251904: ran out in year 291905: ran out in year 231906: ran out in year 201907: ran out in year 211908: ran out in year 291909: ran out in year 211910: ran out in year 2319101911: ran out in year 211912: ran out in year 211913: ran out in year 231914: ran out in year 271915: lasted, $60k left1916: ran out in year 241917: ran out in year 301918: lasted, $1.3M left1919: lasted, $1.8M left1920: lasted, $2.5M left19201921: lasted, $3.4M left1922: lasted, $2.6M left1923: lasted, $2.0M left1924: lasted, $2.2M left1925: lasted, $2.0M left1926: lasted, $1.8M left1927: lasted, $1.5M left1928: lasted, $557k left1929: ran out in year 261930: ran out in year 3019301931: lasted, $397k left1932: lasted, $1.8M left1933: lasted, $1.5M left1934: lasted, $350k left1935: lasted, $923k left1936: ran out in year 271937: ran out in year 211938: lasted, $274k left1939: ran out in year 291940: ran out in year 2919401941: lasted, $280k left1942: lasted, $1.3M left1943: lasted, $1.4M left1944: lasted, $861k left1945: lasted, $513k left1946: lasted, $113k left1947: lasted, $987k left1948: lasted, $1.3M left1949: lasted, $1.2M left1950: lasted, $929k left19501951: lasted, $766k left1952: lasted, $572k left1953: lasted, $585k left1954: lasted, $657k left1955: lasted, $132k left1956: ran out in year 281957: ran out in year 291958: lasted, $106k left1959: ran out in year 261960: ran out in year 2619601961: ran out in year 241962: ran out in year 221963: ran out in year 221964: ran out in year 201965: ran out in year 181966: ran out in year 171967: ran out in year 181968: ran out in year 181969: ran out in year 171970: ran out in year 2219701971: ran out in year 211972: ran out in year 191973: ran out in year 171974: ran out in year 281975: lasted, $1.6M left1976: lasted, $854k left1977: lasted, $849k left1978: lasted, $1.9M left1979: lasted, $1.8M left1980: lasted, $2.6M left19801981: lasted, $3.0M left1982: lasted, $4.4M left1983: lasted, $3.1M left1984: lasted, $3.2M left1985: lasted, $3.5M left1986: lasted, $2.4M left1987: lasted, $1.5M left1988: lasted, $2.4M left1989: lasted, $2.1M left1990: lasted, $1.9M left19901991: lasted, $2.6M left1992: lasted, $1.7M left1993: lasted, $1.4M left1994: lasted, $1.3M left

LastedRan out

Every 30-year retirement since 1871 at 5.25%, 60/40. Each bar is a start year.
$0$1.0M$2.0M$3.0MYear 0Year 10Year 20Year 30

Good 10%MedianBad 10%

Balance over 30 years at 5.25%, 60/40, across every start year. Real dollars, $1M start.

By portfolio and strategy

PortfolioFixedBear-market cutCash bucketBad 10% endingMedian ending
100% stocks79%92.7%71.8%$0$1.8M
80/2074.2%92.7%70.2%$0$1.1M
60/4066.1%88.7%61.3%$0$524k
40/6054.8%75.8%50.8%$0$94k

Success is the share of start years in which the money never ran out. Endings are for the fixed strategy, in today's dollars. 20% cut in bear markets: spending drops 20% while the portfolio is more than 20% below its inflation-adjusted high. 2-year cash bucket: two years of spending held in cash earning 0.5% real, spent after years when stocks fell and refilled after years they rose.

← 5% · 5.5% → · 20 years · 25 years · 40 years · 50 years

Questions

Is 5.25% a safe withdrawal rate for 30 years?

A 5.25% withdrawal ($53k a year from $1M, raised with inflation) lasted 30 years in 66.1% of start years since 1871 with a 60/40 portfolio, and 79% with 100% stocks. By the usual 95% standard it was not safe on its own; a lower rate or flexible spending helped.

What was the worst year to retire at 5.25%?

1966: with 60/40 the money ran out in year 17.

Does cutting spending in bear markets help?

At 5.25% over 30 years with 60/40, a 20% cut whenever the portfolio was 20% below its high took success from 66.1% to 88.7%.

Test your own plan. Your spending, housing, Social Security and health insurance against every year since 1871. Free.

Start your Journey →