Saturday, July 30, 2011

Success Rates for 4% Retirement Withdrawal Rate Rule


































This figure shows how the success rate for the 4% rule with a 30-year retirement duration varies with changing underlying average real returns and standard deviations.

I made the figure with a "contour" function and I don't trust the exact places where it drew the lines. They are close to the right places though.  This figure does show how dependent the success rates are on the underlying assumptions driving the portfolio.