# Retirement withdrawals: a 4% draw in a bad year

> Walk a 4% yearly withdrawal through a real bad year, 2022, on a 60% stock benchmark, and see why the draw grows as the balance falls. Real dated data.

Data as of Nov 10, 2026. Rebuilt every trading night.

## Retirement withdrawals: a 4% draw in a bad year

Data as of Nov 10, 2026. Rebuilt every trading night.

Drawing $20,000 a year from $500,000 in a 60% stock mix left $404,018 after 2022's 15.83% fall and $518,485 by Dec 31, 2025, hypothetically.

Building Wealth · Lesson 6 of 6 1 2 3 4 5 6

Set a balance. See what each calendar year did to it, before any draw. Starting balance $500,000 On $500,000: 2022 −$79,148, 2023 $76,621, 2024 $51,293, 2025 $80,942. Hypothetical balance. ETFIQ Strategic 60% stocks, calendar-year returns; before 2026-10 the rule is applied to past prices.

### The question

"When I retire, how much can I take out each year? And what happens if the market drops right after?"

### The idea

- In retirement, money flows the other way: you draw from your savings each year instead of adding to them. A common starting point is the 4% rule of thumb : take 4% of your savings in the first year. (The usual version raises that dollar amount each year to keep up with rising prices. Here we keep it flat.)

- The risk is a fall early on. When the balance drops, the same dollar draw becomes a bigger share of what's left , and the dollars you take out are no longer there to recover.

### Worked example

We'll use ETFIQ Strategic, 60% stocks , one of ETFIQ's benchmarks: a fixed mix of low-cost index ETFs, about 60% stocks, reset to that mix each month.

ETFIQ began tracking it on Oct 5, 2026 ; earlier years apply its rule to past prices, so they are hypothetical . All returns below are its calendar years, from one table, with prices to Nov 10, 2026 .

Start with $500,000 on the first day of 2022. The draw is 4%: $20,000 , set aside at the start of each year to live on.

Step 1. 2022, a bad year: the mix fell 15.83% .

- Take $20,000: $500,000 − $20,000 = $480,000

- Fall: $480,000 × (1 − 0.1583 ) = $404,018

Dollar results use each year's unrounded return, so multiplying the rounded returns shown can differ by a few dollars.

Step 2. Look at the next draw. $20,000 was 4% of $500,000. Now it is $20,000 ÷ $404,018 = 4.95% of what's left. Same dollars, bigger bite.

Step 3. The next three years were good: +15.32% , +10.26% , +16.19% .

| Year | Start, after the $20,000 draw | Return | End |
| --- | --- | --- | --- |
| 2022 | $480,000 | −15.83% | $404,018 |
| 2023 | $384,018 | +15.32% | $442,865 |
| 2024 | $422,865 | +10.26% | $466,245 |
| 2025 | $446,245 | +16.19% | $518,485 |

After four years and $80,000 taken out, the balance was back above $500,000.

Step 4. Now double the draw to 8%, $40,000 a year, over the same four years. The balance ends 2022 at $387,184 and 2025 at $415,208 : still $84,792 short of where it began, even after three strong years.

A bad year early hurts most when the draw is large. The 4% draw had room to recover. The 8% draw kept selling into the hole.

The 4% here is an example for learning, not a plan.

### The common mistake

"A mix with fewer stocks can't have a bad year." In 2022, bonds fell along with stocks. ETFIQ's 20% stock benchmark lost 13.92% , not far from the 60% mix's 15.83% , while the all-stock US benchmark lost 19.49% . Fewer stocks usually means smaller swings, not no swings. Check a mix's worst year before relying on it.

### Check your understanding

Pick an answer to see why. Two of three right passes the lesson.

1. After a fall, what happens to a fixed-dollar yearly draw? A It shrinks as a share of the balance B It stops C It stays 4% of the balance D It grows as a share of the balance Answer: D. It grows as a share of the balance. the same dollars come out of a smaller pile. Not C: 4% was set on the starting balance, not on whatever is left. 2. Pat has $300,000 and takes $12,000 at the start of the year. The rest falls 20%. What share of the new balance is next year's $12,000? A 4.0% B About 5.2% C 20% D About 3.2% Answer: B. About 5.2%. ($300,000 − $12,000) × 0.8 = $230,400, and $12,000 ÷ $230,400 is about 5.2%. Not A: that was the share before the fall. 3. In 2022, ETFIQ's 20% stock benchmark fell 13.92% . What does that show? A A lower stock share doesn't rule out a large loss in one year B Bonds always rise when stocks fall C The 20% mix is riskier than the 60% mix D 2022 data is wrong Answer: A. A lower stock share doesn't rule out a large loss in one year. bonds fell with stocks that year, so even a bond-heavy mix lost. Not C: over 2022 the 60% mix still fell further.

### Takeaways

- A fixed draw becomes a bigger share of the balance after a fall.

- The larger the draw, the harder it is to recover from an early bad year.

- Look up a mix's worst calendar year on ETFIQ before planning withdrawals from it.

### Do it on ETFIQ

Build your own mix and see its worst year

### Where to next

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Source: ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.
Cite: ETFIQ, Retirement withdrawals: a 4% draw in a bad year, data as of Nov 10, 2026. https://etfiq.com/academy/building-wealth/retirement-drawdown/
Licence: https://etfiq.com/license/ Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.
HTML: https://etfiq.com/academy/building-wealth/retirement-drawdown/