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S&P 500 Withdrawal Rate Calculator

Test a retirement withdrawal plan against an all-equity, S&P 500-style portfolio using real historical total-return data — including the index's sharpest historical drawdowns.

Test an S&P 500 withdrawal plan

Why test an all-equity portfolio specifically

An S&P 500-style, all-equity portfolio has historically been among the strongest long-run growth engines of the standard building blocks — but with no bond ballast, it also tends to see larger drawdowns during bear markets, which matters more once withdrawals are happening at the same time. This page is about testing that tradeoff, not recommending it.

Accumulating vs. withdrawing from the same index

An all-equity S&P 500 approach is common advice for the accumulation years, precisely because there's no withdrawal happening yet to interact badly with a downturn — a lower balance during a bad year just means the next contribution buys more shares. That dynamic flips once withdrawals start: the same volatility that was harmless (or even helpful) during accumulation becomes the core risk during a withdrawal phase, which is the specific tradeoff this page is built to test.

Volatility looks different once you're withdrawing

A 100% equity portfolio's long-run average return can look attractive viewed in isolation. But sequence-of-returns risk — explained in more detail on the safe withdrawal rate page — hits an all-equity portfolio harder than a blended one specifically during a withdrawal phase, since there's no bond allocation absorbing part of an early downturn.

What past S&P 500 drawdowns looked like

The index has been through several well-documented downturns — the dot-com crash of 2000-2002, the 2008 financial crisis, the 2020 COVID crash, and the 2022 bear market among them. This calculator lets you start a withdrawal plan from inside one of those windows directly, not only from a recovery point after the fact.

Recovery time is worth testing directly rather than assumed: starting a withdrawal plan the month before a downturn and watching how long the historical outcomes chart shows the balance taking to recover — if it does within the tested window — is more concrete than a general statement about how bear markets “eventually recover.”

Comparing to a blended allocation

A direct way to see the tradeoff: run the same starting balance and withdrawal amount with VOO alone, then add a bond fund like BND at 20-40% of the allocation and compare the historical survival rate and worst-case ending balance between the two runs.

How to use this calculator

Enter a starting balance, a monthly withdrawal, and an inflation adjustment. Then use the historical outcomes chart to test multiple starting periods — not just the default 5-year window — to see how the plan holds up starting from both favorable and difficult points in market history.

Frequently asked questions

Is 100% S&P 500 a good retirement portfolio?

There's no single correct answer — it depends on risk tolerance, time horizon, and how a specific withdrawal plan holds up against real historical downturns. This calculator is built to test that directly rather than assume an answer.

How much has the S&P 500 dropped in past bear markets?

The index has seen multiple significant historical drawdowns, including the dot-com crash, the 2008 financial crisis, the 2020 COVID crash, and the 2022 bear market. Testing a withdrawal plan starting from inside one of these specific periods shows the effect directly, rather than relying on a summary statistic.

Does adding bonds reduce withdrawal risk?

Historically, a bond allocation has tended to reduce volatility during equity downturns, which can help a withdrawal plan in a bad sequence of returns — at the cost of some long-run growth potential. Testing both an all-equity and a blended allocation side by side shows the tradeoff for a specific plan.

What's the difference between VOO and the S&P 500 index itself?

VOO is an ETF designed to track the S&P 500 index as closely as possible; it isn't the index itself, but its historical total returns closely mirror it, which is why it's used here as a practical stand-in.

Can I test a mix of S&P 500 and bonds instead of 100% equity?

Yes — add a bond ETF as a second holding and adjust the weights, or use the dedicated cash allocation for a fixed-rate reserve, then compare the results against the all-equity version.