Data sources
Every Income Horizon result is built from four yearly U.S. series covering 1928 through 2025:
| Series | What it represents | Source |
|---|---|---|
| Stocks | S&P 500 total return, dividends reinvested | Aswath Damodaran, NYU Stern, “Historical Returns on Stocks, Bonds and Bills” |
| Bonds | 10-year U.S. Treasury bond total return | Damodaran, NYU Stern |
| Cash | 3-month U.S. Treasury bill return | Damodaran, NYU Stern |
| Inflation | Consumer Price Index (CPI-U), December to December | U.S. Bureau of Labor Statistics |
Figures are rounded to two decimals. The 2025 figures are preliminary and will be updated when final annual data is published. Every calculation converts returns to real (after-inflation) terms, so all dollar amounts are in today’s money.
Historical testing
For a retirement of a given length, we test every start year with complete data. A 30-year retirement has 69 possible start years, 1928 through 1996. Each test applies that stretch’s actual returns and inflation in order, year by year:
- At the start of each year, that year’s withdrawal is taken out (spending minus any Social Security or pension income you entered).
- What remains earns that year’s real return for your stock and bond mix, rebalanced yearly.
- A retirement “lasts” if every year’s withdrawal could be paid in full.
“Historical success” is the share of start years that lasted. Because consecutive start years share most of their market history, these results are not independent trials; they show how a plan would have held up through real events, not a probability of future success.
Simulated markets
Some comparisons also report results from simulated markets. Each simulated retirement is stitched together from random 5-year blocks of real history, keeping each year’s stock, bond and inflation figures together. Keeping years in blocks preserves real crash-and-recovery patterns that shuffling single years would break. The planner runs 3,000 simulations and the comparison pages run 2,000, each with a fixed random seed so results are repeatable.
Withdrawal strategies
- Fixed spending (4% rule style)
- The first year’s withdrawal rises with inflation every year and never changes otherwise.
- Guardrails
- Based on the guardrail rules published by Jonathan Guyton and William Klinger (2006). Each year we compare your current withdrawal rate with your starting rate. If it has risen more than 20% above the start, spending is cut 10%; if it has fallen more than 20% below, spending is raised 10%. Cuts never take spending below a floor, 80% of starting spending by default.
- Two buckets
- A safety bucket holds the next 4 years of withdrawals (adjustable), invested half in Treasury bills and half in 10-year Treasuries. The rest is a growth bucket, 80% stocks by default. Withdrawals come from the safety bucket. It is refilled from growth only when the growth bucket is within 5% of its previous high, so refills don’t sell investments after a decline.
- Guardrail buckets
- Guardrails set each year’s spending, and the bucket pays it. One extra rule covers lean years: if growth investments fell last year and the cash bucket can’t cover the full plan, you spend a little less that year instead of selling. The cut is at most one guardrail step (10%) and never goes below your floor. Anything cash still can’t cover is sold from growth.
Investment mix
Unless you change it, fixed and guardrail plans hold 60% S&P 500 stocks and 40% 10-year Treasuries. Bucket plans keep four years of withdrawals in Treasuries and invest the rest 80% in stocks, which works out to a similar overall stock share for typical withdrawal rates. Portfolios are rebalanced once a year. Results are not based on a 100% stock portfolio.
Limitations
- Taxes and fees are not included. Withdrawals from pre-tax accounts are taxed as income, and fund fees reduce returns.
- U.S. history only. The U.S. had one of the strongest markets of the 20th century. Other countries’ retirees saw worse outcomes, and future U.S. returns may be lower.
- Index returns. Real portfolios differ from the S&P 500 and 10-year Treasuries.
- Yearly steps. We model one withdrawal and one return per year, not monthly cash flows.
- Limited history. There are fewer than four independent 30-year periods since 1928. Results are a stress test, not a forecast.
- Personal factors. Health, longevity, home equity, required minimum distributions and Social Security claiming rules all matter and are simplified here.
Disclosures
Income Horizon is an educational tool. It is not a registered investment adviser, broker-dealer or tax adviser, and nothing on this site is a recommendation to buy or sell any security or to adopt any strategy. Results are hypothetical, based on historical index data, and do not represent actual investment results. Past performance does not guarantee future results. Before making decisions, consider consulting a qualified, fiduciary financial professional.