How Much Can You Safely Withdraw in Retirement?
Determining a safe retirement withdrawal rate is central to making your money last. Your withdrawal rate is the percentage of your investment portfolio you take out each year to fund your lifestyle. For example, withdrawing $40,000 from a $1,000,000 portfolio equals a 4% withdrawal rate.
The 4% Rule as a Starting Point
The well-known 4% Rule suggests you can withdraw 4% of your portfolio in the first year of retirement, then increase that amount annually for inflation, and historically have a good chance of your money lasting 30 years (with a balanced stock-and-bond portfolio).
It’s a useful benchmark, but not a perfect solution. Markets, interest rates, longevity, and personal circumstances have changed since the original research. Most retirees need a more personalized approach.
What Is a Safe Withdrawal Rate Today?
Rather than a single number, think in terms of a range:
3%–4%: Commonly used as a conservative-to-moderate starting point
Below 3%: Very conservative; may fit early retirees or those seeking higher certainty
Above 4%: Might work if you have strong guaranteed income (pensions, Social Security, annuities) and can cut spending when markets are down
Your safe withdrawal rate depends on:
Time horizon and longevity (retiring at 55 vs. 70)
Investment allocation (stock vs. bond mix)
Other income sources (Social Security, pensions, rental income)
Spending flexibility (ability to reduce expenses in tough years)
Taxes and account types (traditional, Roth, and taxable accounts)
How Withdrawal Rates Fit Into a Retirement Income Plan
A solid retirement income strategy starts with your lifestyle and budget: essential vs. discretionary expenses, plus big one-time costs. From there, you match:
Guaranteed income (Social Security, pensions, annuities) to essential expenses
Portfolio withdrawals to discretionary and variable spending
Coordinating where withdrawals come from (taxable vs. tax-deferred vs. Roth), and in what order, can improve both tax efficiency and portfolio longevity.
How a Financial Advisor Can Help
A fiduciary financial advisor can:
Analyze your specific situation and estimate sustainable withdrawal rates.
Align your investment strategy with your income needs and risk tolerance
Design tax-efficient withdrawal and Roth conversion strategies
Monitor your plan and recommend adjustments as markets and life change.
Instead of relying only on the 4% Rule, working with a professional can help you craft a personalized, sustainable retirement income plan with a withdrawal strategy tailored to your goals and comfort level.
This is being provided for informational purposes only and should not be construed as a recommendation to buy or sell any specific securities. Past performance is no guarantee of future results, and all investing involves risk. Index returns shown are not reflective of actual performance nor reflect fees and expenses applicable to investing. One cannot invest directly in an index. The views expressed are those of Silver State Wealth Management and do not necessarily reflect the views of Mutual Advisors, LLC, or any of its affiliates. Investment advisory services offered through Mutual Advisors, LLC, DBA Silver State Wealth Management, an SEC registered investment adviser. Silver State Wealth Management nor any of its members are tax accountants or legal attorneys, and do not provide tax or legal advice. For tax or legal advice, you should consult your tax or legal professional.
