Retirement Withdrawal Rate Calculator: 60/40 vs 90/10 Portfolio

Compare the 60/40 vs. 90/10 strategies and stress-test your withdrawal plan against market crashes.

How Long Will Your Retirement Savings Last? - The "Decumulation" Challenge

Planning for retirement isn’t just about saving — it’s also about making your savings last. Many people focus on growing their investments, but the real challenge begins once withdrawals start. The key question becomes: How much can you safely withdraw each year without running out of money?

Factors like inflation, market volatility, withdrawal rate, and asset allocation play a major role in how long a portfolio survives. A traditional 60/40 portfolio may provide more stability, while a 90/10 allocation may offer higher potential returns but also greater risk during market downturns. The right approach depends on your timeline, spending needs, and risk tolerance.

This calculator helps you compare withdrawal strategies and test the different portfolio mixes, 60% Stocks / 40% Bonds. and Buffet 90% Index/ 10% Gov Bonds., under realistic scenarios, including stress testing and inflation adjustments. Use it to estimate how long your retirement savings may last and make more confident retirement planning decisions.

🛡️ The Traditional 60/40

60% Stocks / 40% Bonds. The classic retirement portfolio. The bonds act as a shock absorber, aiming to reduce volatility so you don't panic-sell during a crash.

🚀 The Buffett 90/10

90% S&P 500 / 10% Gov Bonds. Warren Buffett's aggressive bet. It accepts wild mood swings in exchange for higher growth, betting that the market always wins long-term.

ℹ️ Key Inputs Explained

📉 Withdrawal Rate The percentage of your portfolio you spend in Year 1. Standard advice is 4%, but early retirees often choose 3.0% - 3.5% for extra safety.

💸 Inflation (COLA) Cost of Living Adjustment. The calculator increases your withdrawal amount by this % every year to maintain your purchasing power.

⚡ Stress Test Lab Simulates a market crash immediately after you retire. This checks if your plan survives "Sequence of Returns Risk."

Retirement Inputs

Starting Fund Size

Annual Withdrawal Rate: 4.0%

Starting Income: $40,000

Inflation Rate (COLA)

📉 Stress Test Lab

Crash Magnitude (Stocks) -15%

Duration (Years) 2 Yrs

Simulates a crash starting in Year 1. Bonds assumed to gain +2% (flight to safety).

Adjust Market Returns ▼

Stock Return (Annual %)

Bond Return (Annual %)

Cash Return (Annual %)

Traditional 60/40

Ending Balance (30 Years)

$0 Safe

Buffett's 90/10

Ending Balance (30 Years)

$0 Safe

📊 Portfolio Health Report

Portfolio Balance Over Time (Depletion Curve)

Total Income Withdrawn vs. Ending Balance

Detailed Withdrawal Schedule

Year	Withdrawal	60/40 Start	60/40 End	90/10 Start	90/10 End

Frequently Asked Questions

📉 What exactly does the "Crash Test" simulate?

The "Crash Test" toggle simulates Sequence of Returns Risk. This is the mathematical reality that the order of your investment returns matters just as much as the average.

Here is the math of why it matters:
Imagine you have $1,000,000 and plan to withdraw $40,000 (4%) per year.

In a Normal Year (+7%):
Your portfolio grows to $1.07M. You take out $40k.
Leaving you with: $1.03M.
Result: You are richer than when you started.
In a Crash Year (-15%):
Your portfolio drops to $850k. THEN you still have to take out $40k to pay bills.
Leaving you with: $810k.
Result: You have dug a deep hole. To get back to $1M, you now need a massive +23% gain on the remaining balance.

The 90/10 Portfolio is more vulnerable here because 90% of your money takes the -15% hit. The 60/40 Portfolio uses bonds as a shock absorber to lessen the drop.

🛡️ How can I adjust if hit by Sequence of Returns Risk?

This calculator assumes you are a robot who withdraws the exact inflation-adjusted amount every year. In reality, you can use Dynamic Spending Rules to save your portfolio:

The "Cash Buffer" Strategy: Keep 2 years of expenses ($80,000) in cash or short-term treasuries. If the market crashes -20%, stop selling stocks. Spend your cash buffer for 2 years. This gives your 90/10 portfolio time to recover.
The "Guardrails" Approach (Guyton-Klinger): If your withdrawal rate creeps up (e.g., your $1M drops to $800k, turning a 4% withdrawal into 5%), you skip the inflation adjustment for that year.
Example: Instead of taking a raise to $41,200, you freeze spending at $40,000. This small cut compounds over 30 years to save the portfolio.
The "Bond Tent": Start retirement with a safer allocation (e.g., 60/40) to survive the first 5 fragile years, then slowly glide back to a 90/10 equity glide path for long-term growth once the danger zone passes.

❓ Is 4% still a safe withdrawal rate?

The "4% Rule" (Bengen Rule) assumes a 30-year horizon with a 50/50 or 60/40 portfolio. While it has historically succeeded 95% of the time, many experts suggest a 3.3% to 3.5% rate for early retirees (FIRE) planning for 40+ years, or for those retiring during times of high stock valuations (high CAPE ratio).

❓ Why does the calculator show higher withdrawals later?

That is the effect of COLA (Cost of Living Adjustment). To maintain your purchasing power, you must withdraw more dollars every year. At 3% inflation, a $40,000 lifestyle today will cost $97,000 in Year 30. Your investments must work hard to keep up with this "lifestyle creep."

📚 Recommended Reading & Resources

Warren Buffett's 2013 Shareholder Letter (PDF)

The original source of the 90/10 strategy recommendation (Page 20). Buffett details why he believes a low-cost S&P 500 index fund combined with short-term government bonds is the ideal portfolio for his wife's inheritance.

The 4% Rule: Safe Withdrawal Rates Explained

A deep dive by Investopedia into William Bengen's famous rule. Learn the history of the 4% rule, its limitations in modern markets, and why many experts are now suggesting a lower withdrawal rate for longer retirements.

Schwab: Understanding Sequence of Returns Risk

Charles Schwab explains why when you retire matters just as much as how much you have. This guide offers practical strategies like the "cash wedge" to protect your portfolio from early market crashes.

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