The withdrawal rate that history could not break
Withdraw 3% in year one, adjust for inflation each year after. Across every 30-year period in over a century of market data, this strategy has never failed. Not once.
Key findings
$1,000,000 starting balance. $30,000/year (3%), adjusted for inflation. 60/40 stock-bond portfolio.
- Success rate: 100%
- Median final balance: $8.5 million
- Worst case: $2.1 million
Even the worst-case scenario — the absolute worst 30-year window in the entire historical record — left retirees with more than double their starting balance after three decades of withdrawals.
The tradeoff
The 3% rule's weakness is not survival — it's opportunity cost. $30,000/year from a $1,000,000 portfolio means living well below what the portfolio could support. Most retirees at 3% died with vastly more money than they started with. Whether that's "safe" or "wasteful" depends on what you fear more: running out of money, or leaving too much on the table.
Compare the 3%, 4%, and 5% rules in Bellavia's calculator.
