Walkthrough
What happened to people who retired in 1973?
Retiring in 1973 meant a stock crash and double-digit inflation in the first two years. Here’s how three plans came through the next 30 years, in today’s dollars.
Starting with $1,000,000 and spending $40,000 a year (rising with inflation), a fixed plan still had $231,781 in today’s dollars by the end of 2002.
- Fixed spending
- Guardrails
- Guardrail buckets
| Plan | Money left (2002) | Lowest balance | Lowest yearly spending | Spending cuts | Years sold right after a drop |
|---|---|---|---|---|---|
| Fixed (4% rule style) | $231,781 | $231,781 | $40,000 | 0 | 11 |
| Guardrails | $945,182 | $434,331 | $32,000 | 3 | 11 |
| Guardrail buckets | $1,131,826 | $457,976 | $32,000 | 3 | 4 |
What this means
A 1973 retiree with $1,000,000 spending $40,000 a year (4.0%) went through the 1973–74 crash and the inflation of the 1970s. With fixed spending, the plan came through, but savings were at their lowest, $231,781, at the end.
Guardrails cut spending 3 times, never below $32,000, and ended with $945,182. Guardrail buckets drew from cash in down years, so they sold investments right after a decline 4 times, compared with 11 times for the fixed plan.
This is one start year. To see how the same plan did across every start since 1928, use the calculators linked below.
Two blows at once
U.S. stocks fell about 14% in 1973 and 26% in 1974, while inflation hit about 9% and then 12%. For a new retiree, that meant selling investments at low prices while each year’s withdrawal grew quickly with prices.
Unlike 1966, a strong recovery came within a decade: the 1980s and 1990s were exceptional for stocks. Plans that got through the 1970s with enough money left recovered strongly.
The lesson for today
The first few years set the course. A retiree who could spend from a cash bucket in 1973 and 1974, or trim spending a little until markets recovered, kept far more invested for the boom that followed. Compare the “sold after a down year” column in the table above.
Assumptions
- Fixed and guardrail plans hold 60% stocks. Guardrail buckets keep 4 years of withdrawals in Treasuries and invest the rest 80% in stocks.
- Guardrails cut spending 10% if the withdrawal rate rises 20% above where it started and raise it 10% if it falls 20% below, with a floor at 80% of starting spending.
- Actual S&P 500, 10-year Treasury, T-bill and CPI figures for 1973–2025. Amounts in today’s dollars, before taxes and fees.
New to a term? See the retirement income glossary.
Common questions
How did people who retired in 1973 do?
With a balanced 4% plan, our data shows the money lasting 30 years, though savings ran low by the end. Guardrails and guardrail buckets finished with much more.
What was the 1973–1974 bear market?
A decline of roughly 40% in U.S. stocks over two years, alongside the oil embargo, rising inflation and a recession.
Related tools
How we calculate this
We run three plans through the actual years since your start date: fixed inflation-adjusted spending, guardrails on the withdrawal rate, and guardrail buckets (guardrails plus a cash bucket refilled only near market highs).
Data: S&P 500 total returns, 10-year Treasury and 3-month Treasury bill returns as compiled by Aswath Damodaran (NYU Stern), and CPI-U inflation from the U.S. Bureau of Labor Statistics, 1928–2025 (2025 preliminary). Read the full methodology and limitations.