What If You Retired in 1968? The 4% Rule, Backtested
A $1,000,000 60/40 portfolio, retiring in 1968 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 | +6% | −2% | +3% | $40,000 | $987,000 |
| 2 | 66 | −12% | −8% | −10% | $40,000 | $848,000 |
| 3 | 67 | −2% | +11% | +3% | $40,000 | $834,000 |
| 4 | 68 | +11% | +9% | +10% | $40,000 | $875,000 |
| 5 | 69 | +15% | −1% | +9% | $40,000 | $907,000 |
| 6 | 70 | −21% | −5% | −15% | $40,000 | $741,000 |
| 7 | 71 | −35% | −7% | −24% | $40,000 | $534,000 |
| 8 | 72 | +30% | +1% | +18% | $40,000 | $585,000 |
| 9 | 73 | +18% | +9% | +14% | $40,000 | $623,000 |
| 10 | 74 | −14% | −3% | −10% | $40,000 | $527,000 |
| 11 | 75 | −2% | −8% | −4% | $40,000 | $466,000 |
| 12 | 76 | +5% | −13% | −2% | $40,000 | $416,000 |
| 13 | 77 | +20% | −12% | +7% | $40,000 | $403,000 |
| 14 | 78 | −14% | −2% | −9% | $40,000 | $330,000 |
| 15 | 79 | +18% | +29% | +22% | $40,000 | $355,000 |
| 16 | 80 | +18% | −1% | +10% | $40,000 | $348,000 |
| 17 | 81 | +2% | +10% | +5% | $40,000 | $324,000 |
| 18 | 82 | +27% | +22% | +25% | $40,000 | $355,000 |
| 19 | 83 | +17% | +21% | +19% | $40,000 | $373,000 |
| 20 | 84 | +1% | −6% | −2% | $40,000 | $327,000 |
| 21 | 85 | +12% | +3% | +8% | $40,000 | $311,000 |
| 22 | 86 | +26% | +12% | +20% | $40,000 | $327,000 |
| 23 | 87 | −9% | +2% | −5% | $40,000 | $273,000 |
| 24 | 88 | +27% | +12% | +21% | $40,000 | $282,000 |
| 25 | 89 | +5% | +5% | +5% | $40,000 | $255,000 |
| 26 | 90 | +7% | +11% | +9% | $40,000 | $233,000 |
| 27 | 91 | −1% | −10% | −5% | $40,000 | $184,000 |
| 28 | 92 | +35% | +21% | +29% | $40,000 | $186,000 |
| 29 | 93 | +20% | −1% | +12% | $40,000 | $163,000 |
| 30 | 94 | +30% | +9% | +22% | $40,000 | $150,000 |
What this sequence teaches
Over the first five years of this retirement (1968–1972), a 60/40 portfolio's cumulative real return was +14%. 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 $150,000 in 1997, its lowest point of the full run.
With a moderate first five years, this plan's outcome hinged more on the middle and later years of the sequence than on the start — a reminder that sequence risk is about the whole path, not just the opening years.
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.