BacktestFolio · Glossary
SWR
In plain language
The percentage of wealth you can set as an annual withdrawal without running out of money within the chosen horizon, on the past data or simulations you are looking at. The '4% rule' is the most cited example for roughly 30 years on US data; change the horizon, mix or costs and the number changes.
Technical definition
Safe Withdrawal Rate: for each duration, the highest initial withdrawal rate that in none of the historical periods analysed depleted capital (or, with a final goal, left at least that share at the end). It is the minimum across all periods, duration by duration.