Dynamic SWR Calculator
A dynamic safe withdrawal rate: the current balance amortised over the remaining years at a conservative assumed return.
Part of the FIRE simulator, a historical backtest calculator that replays your plan across every rolling window of market history since 1871.
How the Dynamic SWR strategy works
Dynamic SWR uses the same amortisation mechanic as VPW, spreading the live balance across the remaining years, but at a more conservative assumed return, which front-loads less spending and holds more back for later years. Spending still tracks the portfolio, just more cautiously than VPW.
What the Dynamic SWR strategy trades off
Dynamic SWR runs VPW's amortisation at a more conservative assumed return, holding back more for later years and limiting the damage an over-optimistic return input can do. In strong markets it leaves spending unclaimed.
Pros and cons
Pros
- Adaptive like VPW but more conservative
- Lower risk of over-spending early
- Smooths income relative to aggressive rules
Cons
- Leaves more on the table in strong markets
- Still varies with portfolio value
- Depends on the chosen return assumption
Parameters you can adjust
- Assumed annual return: The yearly return the annuity math assumes when spreading the balance over the remaining years. Lower than VPW by default, so it holds more back for later years.
Backtest Dynamic SWR against market history
Opens the simulator with Dynamic SWR already selected, so you only set your portfolio and horizon.