Can you live off a portfolio? A real withdrawal backtest
The retirement question is brutally simple: if I stop adding and start taking, does the portfolio survive? Backtesting can't promise the future, but it can show how the plan behaved through real markets — including 2020 and 2022.
The scenario
$500,000 in a dividend-leaning mix (40% SCHD, 30% VYM, 20% JNJ, 10% Realty Income), withdrawing $1,667/month — the classic 4% a year — starting January 2015, dividends reinvested.
| Result (2015 → mid-2026) | |
|---|---|
| Total withdrawn | $230,046 |
| End balance | $1,230,413 |
| Dividends generated | $278,174 |
| Depleted? | Never |
Despite pulling out nearly a quarter-million dollars, the balance more than doubled — and notice that the dividends alone ($278k) exceeded everything withdrawn. In this window, the income covered the lifestyle and the growth was a bonus.
Before you celebrate
This backtest began in 2015, near the start of a strong bull run. Start the same plan in 2000 or 2008 and the story gets much harder — sequence-of-returns risk is the reason the "4% rule" is a research finding about worst cases, not a guarantee about averages. A withdrawal plan should be tested against ugly start dates, not flattering ones.
Then drag the start date around. That single exercise teaches more about retirement risk than most books.