Safe Withdrawal Rate

Personal Finance

Safe Withdrawal Rate (SWR) is the percentage of a retirement portfolio you can withdraw annually with a high probability of not running out of money. The classic 4% rule, derived from the Trinity Study, found that a 60/40 portfolio rebalanced annually survived 30-year retirements 95%+ of the time at a 4% inflation-adjusted withdrawal. Recent research suggests 3.3-3.5% is safer for early retirees expecting longer horizons (40-50 years) and lower expected returns. To translate: needing $80,000 per year requires roughly $2 million at the 4% rule, or $2.4 million at 3.3%. SWR is the headline number behind FIRE math.