What are the Safe and Perpetual Withdrawal Rate metrics?

Two of the detailed metrics answer a retirement question rather than an investment one: given this strategy's actual history, how much could you have pulled out every year without running out of money?

Both follow the method William Bengen introduced in 1994, which is stricter than it first sounds. The number you see is not what one retirement would have supported. It is the worst outcome across every 30-year retirement the strategy's history contains.

How the cohorts work

Take a strategy with 46 years of monthly returns. A retirement beginning in January 1985 and running 30 years is one cohort. February 1985 is another. March 1985 is another. Roll that window forward one month at a time and a 46-year record yields roughly 200 distinct 30-year retirements, each with its own sequence of good and bad years.

Every one of them is tested. The published figure is the worst of them.

That distinction matters more than it might appear. A single run starting at the beginning of a strategy's record tests exactly one entry point, and an early-1980s start happens to be close to the most favourable moment in the modern record. Reporting that number would describe a lucky retirement rather than a safe rate. The minimum across all cohorts is what the word "safe" is doing.

Because a 30-year cohort needs 30 years of data, and because a minimum is only meaningful if there are enough cohorts to take a minimum of, both metrics require at least 35 years of history. Strategies with less show N/A rather than a number built from too few retirements.

Safe Withdrawal Rate (SWR)

SWR is the largest annual withdrawal, as a percentage of your starting balance, that would have carried a full 30-year retirement through to the end without the account reaching zero, beginning in any month on record.

The withdrawal is held constant in real terms. A withdrawal fixed in dollars shrinks every year in what it actually buys, so holding it constant in purchasing power is what makes the figure describe a standard of living rather than a dollar amount.

Perpetual Withdrawal Rate (PWR)

PWR asks a stricter question over the same cohorts: what could you have withdrawn while leaving the account, in real terms, at least as large at the end of 30 years as it was at the start? SWR permits you to spend the balance down toward zero. PWR does not touch the principal.

PWR is therefore always at or below SWR. The gap is usually small, often a few tenths of a percentage point, and it is smaller for strategies that compound faster. That is not a rounding artefact: when a portfolio grows a great deal over 30 years, the extra draw that spending down the principal would buy you is small next to what the growth itself already supports.

They ignore the date range

This is the one behaviour that surprises people, and it is deliberate.

Every other figure in Detailed Metrics answers "over the period you selected." These two do not. They always use the strategy's full history, whatever range is on screen. A sustainable withdrawal rate is a property of the strategy, not of the window you happen to be looking at, and tying it to the range would mean the number vanished on any view shorter than 35 years. The row labels carry "(full history)" so the exception is visible rather than silent.

What the toggles do

• Inflation Adjusted does not move these numbers at all. They are real-terms figures by definition, so the calculation converts to real returns internally regardless of the toggle's position.
• Include Trading Friction does apply. Costs come out of the return stream the cohorts are built on, so leaving friction off produces a rate that is optimistic for reasons unrelated to withdrawal math.
• Taxable Account does not feed these metrics. They are computed pre-tax. Real withdrawals are taxed, so treat the published figure as an upper bound on what you could actually spend.

Where they appear

• Detailed Metrics, under Withdrawal Rates, for every strategy on screen
• Below the Rolling Returns chart on the Strategy View, with dotted reference lines on the chart itself. When the Inflation Adjusted toggle is off, the chart plots nominal returns, so the lines are drawn at a nominal equivalent and the real rate is shown beneath. The two figures always appear together.
• Snapshots Leaderboard, ranked by either rate, with the other shown alongside
• Withdrawal Calculator, where PWR mode anchors the projection on the strategy's own sustainable rate instead of a generic figure

How to read them

• These are historical figures, not probabilities. They report what would have survived sequences that actually occurred. There is no confidence interval attached. For a distribution rather than a single answer, the Range of Outcomes view on the equity chart resamples the same returns thousands of times.
• The cohorts overlap heavily. Two hundred rolling windows drawn from 46 years of data share most of their months, so the number of genuinely independent retirements in the test is far smaller than 200. The figure is more robust than a single path and much less robust than the cohort count suggests.
• Sequence matters more than average return. A crash early in retirement, while the balance is large and withdrawals are eating into a falling account, does far more damage than the same crash later. Two periods with identical average returns can produce very different SWRs. That is why this is worth looking at separately from CAGR.
• These come from backtested strategy returns, not an index. The familiar 4% figure was derived from a traditional stock and bond portfolio using actual index history. A strategy's SWR inherits whatever optimism its backtest carries, including the fact that strategies which backtested well are the ones that end up published. Comparing against 4% is reasonable; treating a much higher figure as equivalently established is not.
• Early cohorts may rest on reconstructed data. For strategies whose holdings did not exist as tradable funds in the 1980s and 1990s, those years are built from index and proxy series. The cohorts that set the minimum are often the early ones, so the figure can depend on data that is modelled rather than observed.

What these numbers are not

They are not a retirement plan and not a recommendation. They describe a strategy's historical capacity to support withdrawals across the retirements its own record contains.

A real retirement introduces everything the model leaves out: a specific horizon rather than a fixed 30 years, taxes on the withdrawals themselves, Social Security and other income, spending that is lumpy rather than smooth, and the near certainty that you would change your behaviour after a bad year rather than mechanically withdrawing the same amount into a falling account.