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SWR Methodology Comparison

Compare four academic 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 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

52%

Monte Carlo success rate

Withdrawal: $40,000/yr · SWR: 4.00%

Median terminal wealth: $26,128

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A safe withdrawal rate (SWR) is the percentage of a starting portfolio that can be withdrawn in the first year, then adjusted for inflation, with a low chance of running out over a set retirement horizon.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, Morningstar's 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.