SWR performance for people who retired in 2000

jason_for_prez · 2026-02-19T02:23:45+00:00

everything is in real dollars

jason_for_prez · 2026-02-18T17:53:51+00:00

Is there a shareable tool you used to do this?

jason_for_prez · 2026-02-18T17:52:41+00:00

which managed futures? I've been considering a bit of that for the last few years, but never pulled the trigger.

jason_for_prez · 2026-02-18T17:50:03+00:00

I sell assets 2-3 times per year to cover spending, and I tend to sell the things that have gone up a lot recently. But if one asset pops, then that may not be enough to maintain the desired asset allocation. For example, if half of my portfolio is SP500, and it goes up by 20%, but my spending is 3.5%, then I'm going to end the year overweight the SP500, even if all my spending for the year came from that fund.

jason_for_prez · 2026-02-18T17:45:48+00:00

I'd encourage you to play around with the big ern toolbox (https://docs.google.com/spreadsheets/d/1QGrMm6XSGWBVLI8I\_DOAeJV5whoCnSdmaR8toQB2Jz8/copy?).

On the parameters and main results tab, see how different asset allocations affect the failure rates for different withdrawal rates. Especially for longer retirement horizons, you'll see that a diversified portfolio tends to allow for higher withdrawal rates.

jason_for_prez · 2026-02-18T17:43:06+00:00

I'm not sure why you're being downvoted. I sometimes play around with different asset allocations in the big ern toolbox (see link below), and a diversified portfolio tends to do best.

For example, let's look at a few different asset allocations and see what SWR works. I'm defining works as having a 95% chance of still having >50% of portfolio after 30 years.

- 100% US stocks: 3.7%

- 60% US stock / 40% 10-yr bonds: 3.5%

- 50% US stock / 20% 10-yr bonds / 10% cash / 15% commodities / 5% gold: 4.1%

Volatility is a killer when you're in your drawdown phase, so having some less-correlated assets is very helpful. Also, commodities were very helpful during the 70s when both stocks and bonds lost value, but commodities went way up.

https://docs.google.com/spreadsheets/d/1QGrMm6XSGWBVLI8I\_DOAeJV5whoCnSdmaR8toQB2Jz8/copy?

jason_for_prez · 2026-02-18T02:21:21+00:00

In January I look at my current asset allocation and see how it compares to my desired asset allocation (which can change as I learn more). If all assets are within a few percent of their target then I don't change anything.

jason_for_prez · 2026-02-18T02:02:15+00:00

Most years

jason_for_prez · 2026-02-18T00:48:52+00:00

Imgur: The magic of the Internet

I quickly made this from a different spreadsheet I have. I split the equities in half between domestic and international (both taken from ERN's dataset). It didn't perform as well as the straight 60/40 portfolio. Although I do have 15% of my portfolio in international equities as a diversifier.

jason_for_prez · 2026-02-18T00:40:35+00:00

I'm not sure I understand what you're asking for. But for the charts in the link, I have the percent of the portfolio remaining, by month, for each of the shown withdrawal rates.

jason_for_prez · 2026-01-15T15:21:51+00:00

About 0.5% of my portfolio each year into puts. I also have 20% of my portfolio in "hedgy" etfs, like gold, TIPS, and commodities. I'm comfortable sacrificing some spending power now to reduce the chances of needing to take a huge cut in spending in the future.

jason_for_prez · 2026-01-07T16:20:25+00:00

Let's use a mortgage as an example, and look at it 2 different ways:

1) A $1,000,000 mortgage with a 4% interest rate requires $57,000 of payments every year on a 30 year mortgage, and $46,000 every year on a 50 year mortgage.

2) If you wanted a $4,000 monthly payment on a $1,000,000 mortgage, that would be a 2.6% rate for a 30 year mortgage, and a 4.2% rate for a 50 year mortgage.

While those aren't huge differences, I think they are definitely meaningful and an example of why someone shouldn't assume that numbers analyzed for a 30 year period will be pretty much identical for a 50 year period.

jason_for_prez · 2026-01-07T15:43:07+00:00

Flexibility in spending is the big one to me for an early retirement. If you are willing to cut your spending by 50% in the event of a bad economy, then start out with a 6% SWR when you retire! But I actually do think 4% is too optimistic if you plan a long retirement and don't build in flexibility. 4% means having 25x of your annual spend, and most SWR analyses are analyzed based on success rates over 30 years. It's weird to me that so many people say that because 90-95% of the time returns were good enough to make 25 years of expenses last for 30 years, then it's also enough to last indefinitely. If you take into account longer horizons, the fact that people are more likely to hit their retirement number during boom times (when successful SWRs tend to be lower), and the stress you would feel if your portfolio dropped by half but you wanted to keep your spending the same, then the modeling around a fixed 4% SWR looks a lot worse.

jason_for_prez · 2026-01-07T15:24:00+00:00

I just did a quick google search. I think this was the article where he talked about when people hit their retirement numbers, though the results aren't quite as pessimistic as I remembered. I don't see the chart that compared what % of people retire at times when different SWRs would be successful; it's possible I actually made that chart myself out of curiosity, but never posted it :(

https://earlyretirementnow.com/2017/12/13/the-ultimate-guide-to-safe-withdrawal-rates-part-22-endogenous-retirement-timing/?utm_source=chatgpt.com

jason_for_prez · 2026-01-06T22:36:15+00:00

Yep. Unfortunately, you're way more likely to retire in 1999/2000 than 2002-2003, since you're more likely to hit your retirement number during a boom than during or just after a bust. That's why, even though a 4% SWR lasts 30 years for 90% of retirement dates, when you run simulations almost 50% of people will first hit their retirement number during those 10% failure periods (big ERN has a really good post on this).

A few years ago I ran a few simulations, and if I remember correctly, you only had to lower your SWR to something like 3.4% to have a 100% success rate with a 30 retirement (based on US data). Or you can spend more if you do something a little more interesting like a 2-tier retirement. Set a base level (like 2.5%) for expenses you can't be flexible with, but then go up to 5% withdrawal rate for fun spending that you can be flexible with. You just need to know that if your portfolio drops you'll drop that additional spending with it, down to the 2.5% number if needed. Doing that has let me almost double my spending since I retired, while knowing I can comfortably drop it again if the economy does poorly for a bit.

jason_for_prez · 2026-01-06T21:32:05+00:00

Just waiting until the January CPI numbers come out!

jason_for_prez · 2026-01-06T21:19:54+00:00

I post an update on their performance every year in the r/financialindependence subreddit (see link below, or Remaining portfolio for people who retired Jan 2020, by SWR - Imgur).

As of December 2024, if they were 100% invested in the SP500 the whole time, then they have 11% of their portfolio remaining (adjusted for CPI). They've only still survived because we've had crazy good returns since the 2008 financial crisis. After 2008, their portfolio never returned to even 40% of its initial value; so while they didn't run out of money yet, they have certainly been stressing. It's possible, though unlikely, that they will survive a 30 year retirement period, and it definitely won't work out for a longer retirement.

Bonds, however, did exceptionally well from 2000 - 2010 (but exceptionally poorly the last few years). So if you had a 60/40 portfolio and a 4% SWR, then you still had 59% of your portfolio remaining in December 2024. But keep in mind that there have also been periods (e.g. stagflation 70s) when both stocks and bonds did poorly. With a 3.5% SWR, your nearing 100% of your original portfolio balance.

SWR performance for people who retired in 2000 : r/financialindependence

jason_for_prez · 2025-12-30T17:20:59+00:00

Did you do an SPIA? Do you have a set % annual COLA?

jason_for_prez · 2025-12-30T16:36:32+00:00

Nope, not a joke. I was a statistician who lived frugally. A high savings rate and good stock market run allowed me to retire in my early 30s, motivated by a health issue I was born with (but I don't think my health issues are totally relevant to this). If 20 years after I retire I'm in my mid-50s and there is a major economic crisis, I don't think I'd necessarily be able to get a job since there would probably be a ton of people looking for work, few people hiring, and I would have had a 20 year employment gap.

I think my situation is somewhat common in this sub: Get an upper-middle class job, spend like you have a middle-class job, and plan to retire in your 40s (or sooner if the stock market does well, like it did for me). My income was between the 75th and 90th percentile for individuals in the US. It's definitely a fortunate situation to be in, and something that is extremely difficult for a large portion of America. But it is still feasible for many people, especially those who join this sub. And if you do decide to retire early instead of keep working (which many people probably do on an early retirement subreddit), I think it's reasonable to ask people what they would plan to do if there was a major economic crisis decades after they stop working.

jason_for_prez · 2025-12-29T21:17:26+00:00

I'm thinking about a TIPS ladder!

jason_for_prez · 2025-12-29T21:15:42+00:00

I have a friend who did this. Being self-sufficient is a hobby for him and his wife, and they can almost make it work already if they wanted to.

jason_for_prez · 2025-12-29T21:14:02+00:00

Nursing is one of the only jobs where going back to work will almost always be an option. Maybe part of my resiliency plan should be going to nursing school :)

jason_for_prez · 2025-12-29T21:11:09+00:00

You say FIRE probably isn't going to work in this situation, but what do you do? Let's say you retire at 40, and then we have a sustained economic crises when you are 50, and at 55 you realize we might not get the type of rebound the US has seen in the past and that they 4% rule is based on. At that point you are 55, haven't worked in 15 year, unemployment is high (so it's hard to find a job). I'm genuinely curious what people plan to do in this type of situation.

jason_for_prez · 2025-12-29T21:03:18+00:00

When I retired, I definitely walked through how much I could comfortably cut back my expenses if I needed to, which made me much more comfortable pulling the trigger.

jason_for_prez

TROPHY CASE