What If You Retired in 1965? The 4% Rule, Backtested
A $1,000,000 60/40 portfolio, retiring in 1965 and spending $40,000/yr (inflation-adjusted), made it the full 30 years against real market history.
Year by year: the 4% plan
| Year | Age | Stocks | Bonds | 60/40 | Withdrawal | End balance |
|---|---|---|---|---|---|---|
| 1 | 65 | +10% | −1% | +6% | $40,000 | $1,014,000 |
| 2 | 66 | −13% | 0% | −8% | $40,000 | $898,000 |
| 3 | 67 | +21% | −6% | +10% | $40,000 | $945,000 |
| 4 | 68 | +6% | −2% | +3% | $40,000 | $931,000 |
| 5 | 69 | −12% | −8% | −10% | $40,000 | $798,000 |
| 6 | 70 | −2% | +11% | +3% | $40,000 | $782,000 |
| 7 | 71 | +11% | +9% | +10% | $40,000 | $818,000 |
| 8 | 72 | +15% | −1% | +9% | $40,000 | $845,000 |
| 9 | 73 | −21% | −5% | −15% | $40,000 | $687,000 |
| 10 | 74 | −35% | −7% | −24% | $40,000 | $493,000 |
| 11 | 75 | +30% | +1% | +18% | $40,000 | $537,000 |
| 12 | 76 | +18% | +9% | +14% | $40,000 | $568,000 |
| 13 | 77 | −14% | −3% | −10% | $40,000 | $478,000 |
| 14 | 78 | −2% | −8% | −4% | $40,000 | $418,000 |
| 15 | 79 | +5% | −13% | −2% | $40,000 | $370,000 |
| 16 | 80 | +20% | −12% | +7% | $40,000 | $354,000 |
| 17 | 81 | −14% | −2% | −9% | $40,000 | $285,000 |
| 18 | 82 | +18% | +29% | +22% | $40,000 | $300,000 |
| 19 | 83 | +18% | −1% | +10% | $40,000 | $287,000 |
| 20 | 84 | +2% | +10% | +5% | $40,000 | $260,000 |
| 21 | 85 | +27% | +22% | +25% | $40,000 | $274,000 |
| 22 | 86 | +17% | +21% | +19% | $40,000 | $278,000 |
| 23 | 87 | +1% | −6% | −2% | $40,000 | $234,000 |
| 24 | 88 | +12% | +3% | +8% | $40,000 | $210,000 |
| 25 | 89 | +26% | +12% | +20% | $40,000 | $205,000 |
| 26 | 90 | −9% | +2% | −5% | $40,000 | $157,000 |
| 27 | 91 | +27% | +12% | +21% | $40,000 | $142,000 |
| 28 | 92 | +5% | +5% | +5% | $40,000 | $107,000 |
| 29 | 93 | +7% | +11% | +9% | $40,000 | $73,000 |
| 30 | 94 | −1% | −10% | −5% | $40,000 | $31,000 |
What this sequence teaches
Over the first five years of this retirement (1965–1969), a 60/40 portfolio's cumulative real return was −1%. The single worst year in the tested window was 1974, when the 60/40 blend returned −24% in real terms.
Under the 4% withdrawal plan, the real portfolio balance bottomed out at $31,000 in 1994, its lowest point of the full run.
Because the first five years were net negative, this retirement faced early sequence-of-returns risk: withdrawals were drawn from a shrinking pool before growth had a chance to rebuild it — the single biggest driver of historical 4%-rule failures.
What RetireOdds actually simulates
The table above is the transparent skeleton: one portfolio, one withdrawal rule, one sequence of real historical returns, before taxes. It's meant to be checkable by hand.
Inside RetireOdds, the same year-by-year loop runs against your plan and adds what a real retirement actually has to deal with: federal and state taxes with account buckets (taxable, tax-deferred, Roth) drawn in order, Social Security claiming and its partial taxability, Required Minimum Distributions, healthcare costs (ACA subsidies before 65, Medicare and IRMAA after), Roth conversions, and one-time life events.
It also runs three engines instead of one: Monte Carlo (1,000 lognormal real-return paths calibrated to this same 1928–2023 dataset), a block bootstrap of this history, and the historical replay shown on this page. A plan fails if any year is unfunded — including the last one.
Read the full method on /methodology, walk through the product in the user guide, or try your own numbers in the free calculator.
Returns are approximate, rounded, planning-grade real (inflation-adjusted) totals for US large-cap stocks and 10-year Treasuries — this is educational modeling, not financial advice.