What is it exactly? Per the Oxford Languages Dictionary, luck is “success or failure apparently brought by chance rather than through one’s own actions.”

It was recently suggested that we may have been the beneficiaries of luck, which is why we are able to enjoy the lifestyle to which we have become accustomed. And given that this is the product of chance, it is irresponsible or misleading to suggest that others could do the same if only they made similar choices.

Is that an accurate statement? Let’s explore.

Getting Lucky

With games of chance we know the exact probability of specific outcomes. With a coin toss we know the odds of Heads or Tails are exactly 50%.

I don’t think too many people would be surprised by the outcome of a single coin toss, but many would say it was very lucky to toss 5 Heads in a row (or unlucky, depending on how you were betting.)

But what about things that are less cut and dry, like retirement?

Is someone lucky because the stock market didn’t crash the day they retired? (What are the odds?!)

Is it lucky for a retirement portfolio to continue to grow even years after the paychecks stop? (Is it still luck if a person’s choices/actions contributed to the growth, e.g. spending only dividends?)

We could try to answer these hypotheticals with our gut feel, but I prefer a numbers based approach.

Historical Portfolio Growth in Retirement

We recently celebrated our 10-year anniversary of nontraditional living. Despite spending a great deal of money during those years, our portfolio has increased in size.

Did we get lucky?

It is better than the alternative, obviously, but is it the same as tossing 5 Heads in a row?

To answer that question I once again turned to the wonderful cFIREsim tool and asked it what historical portfolios looked like a decade into 4% withdrawals (with a 75/25 stock/bond mix.)

The results include 143 data points.

Portfolio Value
(relative to Starting Value)
Less than4833%
Equal to9566%

The odds are clearly tilted in a favorable direction – throughout history you were more likely to lose a coin toss bet than to have less money 10 years into retirement. It is the normal and natural outcome. Having 2x as much is as likely as tossing 3 consecutive Heads.

Statistics are better

These numbers are interesting, but some statistical analysis to see how the outcomes are distributed gives a better perspective. (Hint: if you retired with $1 million and 10 years later you had $999,000 (real), would you call that a loss?) For this I used Excel to generate a histogram.

Average = 1.3x / Median = 1.3x

The average / typical portfolio value after a decade of spending 4% would be worth 30% more than the starting point.

Note that “10 years of 4%” is just another way of saying you already spent 40% of the initial portfolio value.

How do we stack up?

Now that we have a baseline and an idea of what would be a normal or reasonable outcome, how do we come out?

Looking at our net worth in mint or Empower at the 10 year point (about October of 2022) has us at 1.6x (real / inflation adjusted.) If you factored in all of our tax shenanigans as well (by estimating after-tax value) we would probably look a little better still.

1.6x… I don’t see any coin-tossing skill on display. In fact, I think our luck has been terrible and that number should be much higher. (The mean with a 3% withdrawal rate is ~1.5x.)

This all assumes no volition on our part – it’s just following the script, making no choices, ho hum I guess we spend another 4% this year.

After all we have done… spending much less in the early years, always spending less than 4%, travel hacking, adding a little income, holding a higher percentage of equities…. and all I get is a small fraction of σ?

Oh well, you place your bets and you takes your chances.

(And I feel lucky – we won at life for sure, no matter what the number on the screen says.)


Luck – when you benefit from outcomes that are unlikely or improbable (and irrepeatable.)

Growing your retirement portfolio in retirement – normal and expected.

If you do what we did, most likely you end up at a similar station in life. Average. No gambling or good luck charms required.

Good luck!