Walkthrough
What happened to people who retired in 2000?
Retiring at the peak of the dot-com boom meant two major crashes in the first nine years. Here’s how three plans fared from 2000 through 2025, in today’s dollars.
Starting with $1,000,000 and spending $40,000 a year (rising with inflation), a fixed plan still had $647,034 in today’s dollars by the end of 2025.
- Fixed spending
- Guardrails
- Guardrail buckets
| Plan | Money left (2025) | Lowest balance | Lowest yearly spending | Spending cuts | Years sold right after a drop |
|---|---|---|---|---|---|
| Fixed (4% rule style) | $647,034 | $571,779 | $40,000 | 0 | 6 |
| Guardrails | $948,887 | $632,719 | $32,000 | 3 | 6 |
| Guardrail buckets | $1,070,111 | $528,932 | $32,000 | 3 | 1 |
What this means
A 2000 retiree with $1,000,000 spending $40,000 a year (4.0%) went through the dot-com crash. With fixed spending, the plan came through, with savings bottoming at $571,779 before ending at $647,034.
Guardrails cut spending 3 times, never below $32,000, and ended with $948,887. Guardrail buckets drew from cash in down years, so they sold investments right after a decline once, compared with 6 times for the fixed plan.
This retirement is only 26 years old in our data, which ends in 2025. It shows how the plan has held up so far, not how it ends.
The lost decade
The S&P 500 fell three years in a row from 2000 to 2002, recovered, then fell sharply again in 2008. Stocks ended the decade roughly where they began. Bonds did well, which helped balanced portfolios more than all-stock ones.
For a new retiree, that meant years of withdrawals from a shrinking portfolio. A 2000 retiree is one of the toughest modern test cases for the 4% rule, alongside 1966.
What made the difference
Plans that could flex did noticeably better. Guardrails trimmed spending after the drops and restored it later. Guardrail buckets spent from cash in the down years, which meant selling far fewer stocks at low prices. The table above counts how often each plan had to sell investments right after a down year.
Assumptions
- Fixed and guardrail plans hold 60% stocks. Guardrail buckets keep 4 years of withdrawals in Treasuries and invest the rest 80% in stocks.
- Guardrails cut spending 10% if the withdrawal rate rises 20% above where it started and raise it 10% if it falls 20% below, with a floor at 80% of starting spending.
- Actual S&P 500, 10-year Treasury, T-bill and CPI figures for 2000–2025. Amounts in today’s dollars, before taxes and fees.
New to a term? See the retirement income glossary.
Common questions
Did people who retired in 2000 run out of money?
With a balanced mix and a 4% withdrawal, not by 2025 in our data, but balances fell well below where they started in today’s dollars. Higher withdrawal rates or all-stock portfolios fared worse.
Is 2000 the worst year to retire?
It’s one of the hardest modern starts. In the full U.S. record, retirements starting in the late 1960s and around 1929 were harder still.
Related tools
How we calculate this
We run three plans through the actual years since your start date: fixed inflation-adjusted spending, guardrails on the withdrawal rate, and guardrail buckets (guardrails plus a cash bucket refilled only near market highs).
Data: S&P 500 total returns, 10-year Treasury and 3-month Treasury bill returns as compiled by Aswath Damodaran (NYU Stern), and CPI-U inflation from the U.S. Bureau of Labor Statistics, 1928–2025 (2025 preliminary). Read the full methodology and limitations.