Retiring in 2006: How That Retirement Is Going, 18 Years In
A $1,000,000 60/40 portfolio, retiring in 2006 and spending $40,000/yr (inflation-adjusted), tested against the 18 years of real market history available since then.
Year by year: the 4% plan
| Year | Age | Stocks | Bonds | 60/40 | Withdrawal | End balance |
|---|---|---|---|---|---|---|
| 1 | 65 | +13% | −1% | +7% | $40,000 | $1,031,000 |
| 2 | 66 | +1% | +6% | +3% | $40,000 | $1,021,000 |
| 3 | 67 | −37% | +18% | −15% | $40,000 | $834,000 |
| 4 | 68 | +24% | −13% | +9% | $40,000 | $867,000 |
| 5 | 69 | +13% | +6% | +10% | $40,000 | $911,000 |
| 6 | 70 | −1% | +14% | +5% | $40,000 | $915,000 |
| 7 | 71 | +14% | +1% | +9% | $40,000 | $952,000 |
| 8 | 72 | +30% | −11% | +14% | $40,000 | $1,035,000 |
| 9 | 73 | +12% | +9% | +11% | $40,000 | $1,103,000 |
| 10 | 74 | −1% | −1% | −1% | $40,000 | $1,052,000 |
| 11 | 75 | +10% | −1% | +6% | $40,000 | $1,069,000 |
| 12 | 76 | +19% | 0% | +11% | $40,000 | $1,146,000 |
| 13 | 77 | −6% | −2% | −4% | $40,000 | $1,058,000 |
| 14 | 78 | +29% | +7% | +20% | $40,000 | $1,223,000 |
| 15 | 79 | +17% | +9% | +14% | $40,000 | $1,347,000 |
| 16 | 80 | +21% | −6% | +10% | $40,000 | $1,440,000 |
| 17 | 81 | −24% | −20% | −22% | $40,000 | $1,086,000 |
| 18 | 82 | +22% | +1% | +14% | $40,000 | $1,189,000 |
What this sequence teaches
Over the first five years of this retirement (2006–2010), a 60/40 portfolio's cumulative real return was +13%. The single worst year in the tested window was 2022, when the 60/40 blend returned −22% in real terms.
Under the 4% withdrawal plan, the real portfolio balance bottomed out at $834,000 in 2008, before recovering in later years.
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.