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SWR Methodology Comparison

Compare four approaches to safe withdrawal rates side by side. Results are educational illustrations — not personalized advice.

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Implied SWR: 4.00% ($40,000 ÷ $1,000,000) · Plans to age 95

Your spending of $40,000/yr implies a 4.00% SWR on a $1.00M portfolio. Results vary by methodology below.

Bengen 1994

Historical (Shiller data)

50/50 (as published)

95%

Historical survival rate

Withdrawal: $40,000/yr · SWR: 4.00%

Median terminal wealth: $994,703

Educational illustration only — not personalized financial, tax, or legal advice. Consult a qualified financial advisor or tax professional before making withdrawal decisions.

Bengen Expanded

Historical (Shiller data)

80/20 (as published)

97%

Historical survival rate

Withdrawal: $40,000/yr · SWR: 4.00%

Median terminal wealth: $2.18M

Educational illustration only — not personalized financial, tax, or legal advice. Consult a qualified financial advisor or tax professional before making withdrawal decisions.

Morningstar-style Monte Carlo

Monte Carlo simulation

60/40 stocks/bonds

94%

Monte Carlo success rate

Withdrawal: $40,000/yr · SWR: 4.00%

Median terminal wealth: $1.99M

Educational illustration only — not personalized financial, tax, or legal advice. Consult a qualified financial advisor or tax professional before making withdrawal decisions.

CAPE-Conditioned MC

Formula-based

Monte Carlo · CAPE-adjusted

60/40 stocks/bonds

89%

Monte Carlo success rate

Withdrawal: $40,000/yr · SWR: 4.00%

Median terminal wealth: $1.46M

Educational illustration only — not personalized financial, tax, or legal advice. Consult a qualified financial advisor or tax professional before making withdrawal decisions.

How we calculate these numbers — the exact assumptions behind each methodology, validated against published research.

Frequently asked questions

What is a safe withdrawal rate?
A safe withdrawal rate (SWR) is the percentage of a starting portfolio that can be withdrawn in the first year, then adjusted for inflation, with a low chance of running out over a set retirement horizon. The best-known estimate is the '4% rule' from William Bengen's 1994 study.
Is the 4% rule still accurate?
The 4% rule remains a useful benchmark, but later research shows the sustainable rate varies with retirement length, asset allocation, fees, and starting market valuations such as CAPE. This tool shows Bengen 1994, Bengen Expanded, a Morningstar-style Monte Carlo estimate, and a CAPE-conditioned rate side by side so the range is visible rather than a single figure.
Why do different methods give different safe withdrawal rates?
Each method makes different assumptions: Bengen used historical U.S. sequences over a 30-year horizon; Monte Carlo methods simulate many random return paths; CAPE-conditioned methods lower the rate when valuations are high. Comparing them shows how sensitive the 'safe' rate is to methodology.