Withdrawal Rate

Retirement

Withdrawal rate is the percentage of your retirement portfolio you draw annually, typically as an inflation-adjusted amount. The Trinity Study established the 4% rule: starting with 4% of a balanced portfolio, increasing for inflation, historically survived 30-year retirements 95%+ of the time. Recent research suggests 3-3.5% is safer for longer retirements or lower expected returns. A $1.5M portfolio at 4% supports $60,000 first-year withdrawal; at 3.3% it's $49,500. Dynamic withdrawal strategies (reduce spending after bad market years, increase after good years) historically support higher initial withdrawal rates than static strategies. Sequence of returns risk is the dominant threat early.