TL;DR
The 1966 retiree cohort is the single hardest in the US data. Annual CPI averaged 7% from 1966-82; nominal stock returns barely matched it. SWR calibration is essentially calibration to this period.
In short
Stagflation breaks the 60/40 portfolio because both halves lose real value simultaneously. The mitigation tool kit (TIPS, commodities, real estate) didn't exist for 1970s retirees but does today. See our floor and upside article.
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
- Can central banks prevent another stagflation?
- Modern monetary policy aims to anchor inflation expectations. Whether that's robust to large supply-side shocks (energy, geopolitics) is untested.
- What allocation handles stagflation best?
- Real-return assets: TIPS/inflation-linked gilts, broad commodities (energy, metals), and real estate (REITs). All have lower expected returns than equities but better stagflation behaviour.
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