Why does the safe withdrawal rate drop with bonds?
Nominal bonds do not adjust for inflation over long periods, which causes the safe withdrawal rate to plummet to 1 percent if you go all in on bonds. This realization catches retirees by surprise and ruins strategies that rely solely on high nominal yields.
Overview
People affected2 accounts across 1 forum
Workarounds found2 items attempted
Community agreement42 total upvotes
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
2 items+ Contribute
Found another way around this?
Share your steps and trade-offs so fellow engineers don't have to reinvent the wheel. No account required.
- 1Allocating a portion of assets to TIPS (Treasury Inflation-Protected Securities)Did this help you?
- 2Maintaining a diversified portfolio mix of stocks and bonds rather than 100% bondsDid this help you?
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
Where this came up
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