What is the 4% rule, and is it still reliable?

It’s a starting point, not a guarantee. Adjust based on inflation, portfolio performance and personal needs.

Can I adjust my withdrawal rate later?

Yes -- flexibility is one of the keys to making your retirement plan work long-term.

How does inflation affect withdrawals?

Higher inflation means higher expenses, which may require larger withdrawals or spending cuts.

What happens if I withdraw too much?

You risk depleting your savings too soon, which can be especially challenging later in life.

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What Is the Safe Withdrawal Rate And How to Find Yours

August 14, 2025

6 min Read

Written by Rudri Patel

Edited by Joe Evans

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If you’re approaching or already in retirement, knowing your safe withdrawal rate is key to making your money last. This is the percentage you can take out of your retirement savings each year without running out too soon.

For many retirees, the starting point is the 4% rule — withdrawing 4% in your first year of retirement, then adjusting annually for inflation. Historically, this approach has yielded a 90% success rate over 30 years when paired with a balanced portfolio, according to the original Trinity Study.

Here’s what the safe withdrawal rate means, how to calculate your own and the factors that can help (or hurt) your retirement income.

Quick Answer: What Is a Safe Withdrawal Rate in Retirement?

Your safe withdrawal rate is the pace at which you can take money from your retirement accounts each year while keeping your nest egg intact for the long haul.

Typical benchmark: 4% of your portfolio in year one, adjusted for inflation in later years.
Goal: Make your money last 25 to 30 years or more.
Why it matters: A sustainable rate helps you avoid overspending early and facing shortfalls later in life.

How the 4% Rule Became the Gold Standard

The 4% SWR comes from a 1998 study by professors at Trinity University. They examined decades of historical market returns and withdrawal scenarios, concluding that retirees with a diversified 50/50 stock-bond portfolio had strong odds of their money lasting 30 years when following the 4% approach.

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This simple, easy-to-apply formula caught on because:

It gives you a clear starting point.
It can be tailored based on age, health, and risk tolerance.
It works across various market conditions — but isn’t perfect.

Factors That Can Change Your Safe Withdrawal Rate

No single number works for everyone. Your ideal SWR depends on your personal situation.

1. Life Expectancy & Retirement Age

Retiring early or expecting to live into your 90s? Consider lowering your rate to 3 to 3.5%.
According to the Social Security Administration, the average 65-year-old man will live to 84 and the average woman to 87. However, only one in four will live past 90.

2. Market Performance

Poor returns early in retirement, also known as sequence of returns risk, can permanently shrink your portfolio.
In downturns, reduce discretionary spending to protect your principal.

3. Inflation

Inflation erodes your purchasing power. In 2022, it hit a 40-year high of 9.1%, which would have forced many retirees to withdraw more for the same lifestyle.

4. Healthcare Costs

Fidelity estimates a 65-year-old couple will need $315,000 on average for healthcare in retirement.
Big medical bills can force you to adjust your withdrawals.

5. Taxes

Withdrawals from most 401(k)s and traditional IRAs are taxed as ordinary income, which can cut into your spendable cash.

Comparing Common Withdrawal Strategies

How do common withdrawal strategies stack up against one another?

Retirees needing a predictable income	How It Works	Best For
Fixed Percentage	Withdraw the same % each year	Those focused on preserving principal
Fixed Dollar	Withdraw the same dollar amount annually	Retirees needing predictable income
Dynamic	Adjust withdrawals based on portfolio performance	Flexible spenders who can tighten belts in bad years

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How to Find Your Personal Safe Withdrawal Rate

Your withdrawal rate is subjective based on your savings, expenses and other factors. Here are some guidelines to determine your personal withdrawal rate:

Add up all income sources — retirement accounts, pensions, Social Security, rental income and side hustles.
Estimate annual expenses — include housing, food, healthcare, insurance and discretionary costs like travel.
Subtract guaranteed income (Social Security, pensions) from expenses to see how much you’ll need from savings.
Run the numbers with a retirement calculator — like the GOBankingRates Retirement Calculator.
Adjust for your risk tolerance — if markets make you nervous, start conservatively and increase later if possible.

Ways to Make Your Money Last Longer

Delay retirement: Even 2 to 3 extra working years can boost savings and shrink the withdrawal period.
Maximize Social Security: Benefits grow about 8% per year between full retirement age and 70.
Cut expenses: Downsizing housing or reducing travel can help keep withdrawals in check.
Diversify investments: Spread assets across stocks, bonds and other vehicles to manage risk.
Consider annuities: They can provide guaranteed lifetime income.

Risks to Watch Out For

Market downturns early in retirement — reduce spending in bad years to protect your nest egg.
High inflation periods — reassess spending if costs spike.
Unexpected medical bills — keep a robust emergency fund.
Longevity risk — plan for the possibility of living 30+ years in retirement.

Quick Tips for a Sustainable Retirement Plan

Be on the lookout for certain risks with your retirement account:

Start planning early — ideally in your 40s or 50s.
Review annually — adjust for changes in health, expenses or markets.
Keep flexibility — be ready to increase or decrease withdrawals based on conditions.
Maintain an emergency fund — separate from your main retirement savings.

Quick Tips for a Sustainable Retirement Plan

Here are some tips for a retirement plan that will keep up with your lifestyle and market fluctuations:

Start planning early: It’s never too early to start retirement planning. In your 40s, begin considering what you need to do for retirement. Look at your investments, cash on hand, retirement accounts and income streams.

Revisit your plan every year: You should take a look at your plan annually or more frequently if you have a milestone event like marriage, divorce or children. If you have a health crisis, you should also review your retirement plan.

Keep an emergency fund: Always keep an emergency fund for unexpected costs like medical expenses, car repairs or other charges you didn’t necessarily anticipate.

Stay flexible with spending: In some periods of your life, you need to pull back from spending. Know when to do so and plan accordingly.

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Final Take to GO: Finding Your Safe Withdrawal Rate

Your safe withdrawal rate is personal, often shaped by your goals, lifespan, risk tolerance and market conditions. While the 4% SWR is a solid starting point, it’s best to revisit your plan annually and adjust as needed.

Before making changes, consider running scenarios with a trusted retirement calculator or meeting with a fiduciary financial advisor. The right plan can help you enjoy your golden years without worrying about outliving your savings.

FAQs About Safe Withdrawals

Here are the answers to some of the most frequently asked questions about safe withdrawal rates for retirement and how they work:

What is the 4% rule, and is it still reliable?
- It’s a starting point, not a guarantee. Adjust based on inflation, portfolio performance and personal needs.
Can I adjust my withdrawal rate later?
- Yes -- flexibility is one of the keys to making your retirement plan work long-term.
How does inflation affect withdrawals?
- Higher inflation means higher expenses, which may require larger withdrawals or spending cuts.
What happens if I withdraw too much?
- You risk depleting your savings too soon, which can be especially challenging later in life.

Data is accurate as of Aug. 14, 2025, and is subject to change.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.