Improving Withdrawal Rates in a Low Yield World

15 Pages Posted: 23 Aug 2015

See all articles by Andrew Miller

Andrew Miller

Miller Financial Management, LLC

Date Written: August 21, 2015


Decreased real bond yields substantially increase failure rates for portfolios with an initial 4% withdrawal rate. One way to increase the safe withdrawal rate of a portfolio is to decrease the allocation to bonds and to increase the allocation to stocks. Unfortunately, increasing the allocation to stocks dramatically changes the risk profile of the portfolio. I propose that a solution to this conundrum is to use a low volatility stock portfolio as the primary asset class in the portfolio. A portfolio constructed primarily of low volatility stocks allows an investor to decrease the allocation to lower yielding bonds while still maintaining a similar risk profile to a traditional 50% stock and 50% bond portfolio.

Keywords: retirement, systematic withdrawals, 4% rule, safe withdrawal rates

JEL Classification: C15, D14, G10, G11, G17

Suggested Citation

Miller, Andrew, Improving Withdrawal Rates in a Low Yield World (August 21, 2015). Available at SSRN: or

Andrew Miller (Contact Author)

Miller Financial Management, LLC ( email )

PO Box 1702
Muncie, IN 47308
United States

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