Suze Orman: How To Figure Out Your Ideal Retirement Savings Withdrawal Rate

Suze Orman smiles while wearing a blue jacket
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One-third of Americans (33%) said that not saving enough money and/or outliving their savings is their biggest retirement planning fear, a recent GOBankingRates survey found.

Money expert Suze Orman said that the key to feeling confident about your retirement savings is to have a plan for your withdrawals that ensures your savings will last.

“That’s the implicit issue behind withdrawals: how much can you safely withdraw and still have a high probability that if you live well into your 90s you will still have money to support that much older you?” she wrote in a recent blog post. “It is my goal that every retiree be very confident about their withdrawal rate. Retirement is a time to enjoy yourself, not worry.”

Here’s how Orman says you can figure out your ideal retirement savings withdrawal rate.

Ask Yourself These 3 Questions

To figure out your ideal withdrawal rate, Orman said to start by asking yourself three questions:

1. When will you start making withdrawals?

“If you start using money inside your 401(k) [plans] and IRAs at 60 or 62, your rate of withdrawal should be lower than if you start at 68 or 70,” she wrote on her site.

2. How many years until you turn 95?

“If you arrive at age 65 in average health, there is a good probability you will still be alive into your 90s,” Orman wrote. “For those of you in solid health, my recommendation is to assume you will live until at least age 95. If you are in excellent health and have a family history of long-lived parents and grandparents, my advice is to base your withdrawal strategy on wanting your money to last until you are 100.”

Are You Retirement Ready?

3. Can you cover living expenses from guaranteed income sources?

“If your Social Security benefit, a pension (if you have one), and perhaps an annuity completely covers your essential living costs, you may be able to afford to withdraw more of your savings,” Orman wrote. “Be careful with this though. I want you to think about the potential cost of hiring someone to care for you as time goes on or the potential cost of moving to assisted living. That potential cost needs to be part of this calculation.”

Consider This Rule of Thumb

While your own personal calculations may vary, Orman suggests the following rule of thumb as a starting point for figuring out your ideal retirement savings withdrawal rate.

“If you start making withdrawals in your early 60s, my advice is to aim to withdraw and spend no more than 3% or so of your account value in year one, and then adjust that amount for inflation each year,” she wrote in the blog post. “If you don’t start withdrawals until around age 70, 4% can work just fine. And if you have all your living costs covered by guaranteed income, more than 4% may be viable.”

More From GOBankingRates

Are You Retirement Ready?

Survey methodology: GOBankingRates surveyed 1,045 Americans ages 18 and older from across the country between May 1 and May 4, 2023, asking seven different questions: (1) Please state your level of agreement with the statement: A mortgage is the best financial solution when buying a home.; (2) Have you ever personally owned an electric car?; (3) How likely are you to buy an electric car in the next five years?; (4) When was the last time you were in the market for a new car?; (5) Knowing it will save you gas money, how much more would you be willing to spend on an EV over a similar gas-powered car?; (6) What area is your biggest concern during retirement planning?; and (7) What financial steps have you taken for retirement? (Select all that apply). GOBankingRates used PureSpectrum’s survey platform to conduct the poll.


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