TL;DR
A 4%-rule retiree starting Jan 1929 saw their portfolio drop 65% in real terms by 1932. The plan survived only because of the post-WWII boom and required cutting withdrawals materially in the worst years.
In short
1929 is the headline number, but the real story is the 1932–1942 stretch of low returns and intermittent panic. Modern FIRE planners benefit from circuit breakers, FDIC, and a less brittle banking system, but the equity drawdown experience could recur.
We're working on a full deep-dive for this article — including historical data, charts, and worked examples. In the meantime, you can run a free simulation to explore the underlying numbers yourself.
Frequently asked questions
- Could an 89% drawdown happen again?
- Unlikely at the same magnitude due to circuit breakers and policy responses. 50–60% drawdowns are well within the historical range.
- What protected portfolios in the 1930s?
- Cash and short bonds during the crash; equities during the 1932–1937 recovery; international diversification helped marginally.
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