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Chart of the Day: Safe Withdrawal Rates

Samuel A. Kiburz Jan 23, 2024
percentages shown in red, orange, yellow and green

Contents

Today’s Chart of the Day was produced by Ofdollarsanddata’s Nick Maggiulli and shows the probability of success between your withdrawal rates, the percentage you withdraw from your portfolio each year, versus the allocation between stocks and bonds. It covers the results of the last 68 full 30-year periods from 1926 to 2022.

Though the past is no predictor of the future, the concept of taking out too much with too little risk versus not taking out enough with too much risk is important. Also, since outcomes can be impacted significantly by minor changes. For example, the chart highlights the risks of losing 1-2% annually from paying too high of fees for underperforming investments.

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