What is a safe withdrawal rate?

A safe withdrawal rate (SWR) is the percentage of your portfolio you can withdraw annually with high probability it will last your entire retirement. The 4% rule is most common, but 3-3.5% is safer for longer retirements.

Is 4% withdrawal rate still safe in 2025?

The 4% rule works for 30-year retirements with 50%+ stock allocation. For early retirees (40+ year timeline) or conservative planning, 3-3.5% is recommended due to sequence of returns risk and lower expected returns.

What factors affect safe withdrawal rate?

Key factors: retirement timeline (longer = lower rate), portfolio allocation (more stocks = higher safe rate), flexibility to cut spending, Social Security timing, and current market valuations.

What portfolio allocation supports 4%?

The Trinity Study used 50-75% stocks. Higher stock allocation (60-75%) had better success with 4% over 30 years. Lower stock allocation (25-50%) should use 3-3.5% withdrawal rate.

Can I increase withdrawal rate over time?

Yes, if your portfolio grows beyond expectations. Many retirees using guardrails increase spending when portfolio exceeds thresholds. Conversely, be prepared to reduce spending during severe market downturns.

Safe Withdrawal Rate Calculator

Calculate your personalized safe withdrawal rate for retirement

Safe Withdrawal Rate Calculator

Calculate your personalized safe withdrawal rate (SWR). Compare 3%, 3.5%, 4%, and 5% rates to find what works for your retirement timeline.

Total Portfolio Value*

Total value of all retirement accounts and investments

Annual Expenses*

How much you plan to spend per year in retirement

Years in Retirement

10 years60 years

30 years traditional, 40+ for early retirement

Stock Allocation

60-75% stocks is optimal for 4% rule

Inflation Rate

3% is typical long-term average

Understanding Safe Withdrawal Rates

A safe withdrawal rate (SWR) is the percentage of your retirement portfolio you can withdraw annually with high confidence it will last your entire retirement. The concept comes from the Trinity Study (1998) which analyzed historical market returns from 1926-1995.

The study found that a 4% initial withdrawal rate (adjusted annually for inflation) had a 95% success rate over 30-year periods with a 50-75% stock allocation. However, context matters significantly.

Key Findings:

•30 years, 60% stocks: 4% withdrawal rate = 95% success
•40 years, 60% stocks: 3.5% withdrawal rate recommended
•50+ years: 3% or lower for maximum safety
•Lower stock allocation: Reduces safe withdrawal rate

Adjusting Your Withdrawal Rate

Consider a lower withdrawal rate (3-3.5%) if:

⚠You're retiring before age 60 (40+ year timeline)
⚠Your portfolio has less than 50% stocks
⚠You have limited flexibility to reduce spending
⚠You're retiring during high market valuations
⚠You want extra safety margin for peace of mind

You may use a higher rate (4-4.5%) if:

✓Traditional retirement (25-30 years)
✓60-75% stock allocation with diversification
✓Flexibility to reduce spending during downturns
✓Expected pension or Social Security income later
✓Willingness to do part-time work if needed

Frequently Asked Questions

Everything you need to know about this tool