⚠️ IMPORTANT DISCLAIMER:

This tool provides historical analysis for educational purposes only. It is NOT personalized financial, investment, tax, or legal advice. Past performance does not predict future results. The "4% rule" is a simplified guideline that may not suit your situation.

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Withdrawal Rate Failure Analysis

Discover how different withdrawal rates affect portfolio failure rates across 769 historical 30-year periods.

What This Analysis Shows

Purpose: This analysis helps you understand the trade-off between withdrawal rate and portfolio security. Higher withdrawal rates provide more annual income but increase the risk of running out of money.

Why It Matters: The difference between a 4% and 5% withdrawal rate might seem small, but historically it's the difference between never running out of money and having a 6-12% chance of portfolio failure.

Key Insight: The 4% rule isn't arbitrary - it's the highest rate that has historically succeeded in ALL market conditions, including the Great Depression and 2008 financial crisis.

Important Limitations

Not Financial Advice: This analysis is for educational purposes only. It does not consider your specific financial situation, goals, or risk tolerance.

Historical Analysis Only: Past performance does not guarantee future results. Future market conditions may differ significantly from historical patterns.

Consult Professionals: Always seek advice from qualified financial advisors before making retirement planning decisions.

How to Use This Analysis
1. Choose Your Stock Allocation

Higher stock percentages historically provide better returns but with more volatility. 60% stocks is a common balanced approach.

2. Review the Chart

The chart shows failure rates for withdrawal rates from 3% to 10%. Look for the "knee" where failure rates start rising sharply.

3. Find Your Comfort Zone

Decide what failure rate you're comfortable with. Many retirees choose 0-5% failure risk, while others accept 10-15% for higher income.

60%
Percentage of portfolio in stocks vs bonds
Analysis covers
769 Historical Periods
Understanding Failure Rates

Failure Rate: Percentage of historical 30-year periods where the portfolio was completely depleted before retirement end.

Success Rate: Percentage of periods where the portfolio lasted the full 30 years with money remaining.

Key Insight: Even small increases in withdrawal rates can dramatically increase failure risk during market downturns.

Historical Context

Our analysis includes retirement periods starting during:

  • Great Depression (1929)
  • World War II (1940s)
  • 1970s Stagflation
  • 2000 Dot-com Crash
  • 2008 Financial Crisis
  • 2020 COVID-19 Pandemic

This comprehensive coverage provides robust testing of withdrawal strategies.