Portfolio Safety Tables: Minimum Balances
These tables give you insight into the safety of your own portfolio. They show how retirement portfolios perform both when they succeed and when they fail. You will be able to spot dangers early enough to respond.
In all cases, the withdrawal rate was far enough above the Safe Withdrawal Rate to have both successes and failures.
The amounts shown are the minimum balances within the first five years and within the first ten years.
HSWR80
Withdrawal Rate = 5%
Real dollar balances
1921-1980
Survived Min Yr 5 Min Yr 10
Under 50K 0 0
50Ks 0 3
60Ks 5 5
70Ks 6 5
80Ks 8 8
90Ks 9 10
100K 17 14
Total 45 45
Failed Min Yr 5 Min Yr 10
Under 50K 2 10
50Ks 4 2
60Ks 2 1
70Ks 2 0
80Ks 2 1
90Ks 2 1
100K 1 0
Total 15 15
Observations:
1) It is hard to tell anything definite from the first five years. Generally speaking, it is a good sign if your portfolio stays above 80%. It is very bad news if it falls below 60%.
2) It is a very good sign if your portfolio is able to stay above 80% for the first ten years.
3) It is very bad news if your portfolio dips below 50% in the first ten years. It is almost certain to fail.
HSWR50
Withdrawal Rate = 5%
Real dollar balances
1921-1980
Survived Min Yr 5 Min Yr 10
Under 50K 0 0
50Ks 0 2
60Ks 1 1
70Ks 7 7
80Ks 6 7
90Ks 8 8
100K 14 11
Total 36 36
Failed Min Yr 5 Min Yr 10
Under 50K 0 11
50Ks 2 3
60Ks 6 2
70Ks 5 3
80Ks 5 4
90Ks 5 1
100K 1 0
Total 24 24
Observations:
1) It is hard to tell anything definite from the first five years. Generally speaking, it is a good sign if your portfolio stays above 70%. It is very bad news if it falls below 70%.
2) It is a very good sign if your portfolio is able to stay above 90% for the first ten years.
3) It is very bad news if your portfolio dips below 50% in the first ten years. It is almost certain to fail.
SwAT2 (Constrained TIPS Switching)
Withdrawal Rate = 6%
Real dollar balances
1921-1980
Survived Min Yr 5 Min Yr 10
Under 50K 0 0
50Ks 0 0
60Ks 0 4
70Ks 5 5
80Ks 9 10
90Ks 10 8
100K 12 9
Total 36 36
Failed Min Yr 5 Min Yr 10
Under 50K 0 4
50Ks 0 7
60Ks 4 3
70Ks 7 6
80Ks 7 2
90Ks 5 2
100K 1 0
Total 24 24
Observations:
1) It is hard to tell anything definite from the first five years. Generally speaking, it is a good sign if your portfolio stays above 80%. It is very bad news if it falls below 70%.
2) It is a very good sign if your portfolio is able to stay above 80% for the first ten years.
3) It is very bad news if your portfolio dips below 60% in the first ten years. It is almost certain to fail.
SwOptT2 (Optimized TIPS Switching)
Withdrawal Rate = 6%
Real dollar balances
1921-1980
Survived Min Yr 5 Min Yr 10
Under 50K 0 0
50Ks 0 1
60Ks 0 1
70Ks 8 8
80Ks 8 8
90Ks 10 12
100K 11 6
Total 36 36
Failed Min Yr 5 Min Yr 10
Under 50K 0 1
50Ks 0 5
60Ks 1 9
70Ks 6 4
80Ks 10 3
90Ks 6 2
100K 1 0
Total 24 24
Observations:
1) It is hard to tell anything definite from the first five years. Generally speaking, it is a good sign if your portfolio stays above 90%. It is very bad news if it falls below 70%.
2) It is a very good sign if your portfolio is able to stay above 90% for the first ten years.
3) It is very bad news if your portfolio dips below 70% in the first ten years. It is almost certain to fail.
HSWR80T2
Withdrawal Rate = 5%
Real dollar balances
1921-1980
Survived Min Yr 5 Min Yr 10
Under 50K 0 0
50Ks 0 1
60Ks 5 7
70Ks 5 3
80Ks 8 9
90Ks 9 10
100K 18 15
Total 36 36
Failed Min Yr 5 Min Yr 10
Under 50K 1 10
50Ks 5 2
60Ks 2 1
70Ks 2 0
80Ks 2 1
90Ks 2 1
100K 1 0
Total 15 15
Observations:
1) It is hard to tell anything definite from the first five years. Generally speaking, it is a good sign if your portfolio stays above 80%. It is very bad news if it falls below 60%.
2) It is a very good sign if your portfolio is able to stay above 80% for the first ten years.
3) It is very bad news if your portfolio dips below 60% in the first ten years. It is almost certain to fail.
HSWR50T2
Withdrawal Rate = 5%
Real dollar balances
1921-1980
Survived Min Yr 5 Min Yr 10
Under 50K 0 0
50Ks 0 0
60Ks 0 3
70Ks 7 6
80Ks 7 8
90Ks 14 14
100K 13 14
Total 41 41
Failed Min Yr 5 Min Yr 10
Under 50K 0 4
50Ks 0 6
60Ks 5 3
70Ks 5 2
80Ks 3 3
90Ks 5 1
100K 1 0
Total 19 19
Observations:
1) It is hard to tell anything definite from the first five years. Generally speaking, it is a good sign if your portfolio stays above 90%. It is bad news if it falls below 70%.
2) It is a very good sign if your portfolio is able to stay above 80% for the first ten years.
3) It is very bad news if your portfolio dips below 60% in the first ten years. It is almost certain to fail.
Have fun.
John Walter Russell
July 17, 2005