Retirement Withdrawal Rate: How Much Can You Safely Take Each Year?

When you stop working, your retirement withdrawal rate, the percentage of your savings you take out each year to live on. Also known as safe withdrawal rate, it’s the single most important number in your retirement plan. If you pull too much, you risk running out of money. Pull too little, and you might spend your golden years holding back on things you worked hard for. It’s not just about how much you saved—it’s about how you take it out.

The 4% rule gets talked about a lot, but it’s not a law. It came from a 1998 study that looked at U.S. markets from 1926 to 1995. It said if you withdrew 4% of your portfolio in year one, then adjusted for inflation each year after, you’d have money left over 96% of the time over 30 years. But markets today aren’t the same. Interest rates are lower, stock valuations are higher, and people live longer. That means your withdrawal rate needs to adapt. Your portfolio sustainability, how long your savings last based on your spending and investment returns. depends on more than just a fixed percentage. It’s shaped by your sequence of returns risk, the danger of bad market years hitting right after you retire. If your portfolio drops 20% in year two of retirement and you keep taking out 4%, you’re locking in losses. That’s harder to recover from than a drop later on.

Some people use dynamic withdrawal strategies—adjusting their draw based on how the market did that year. Others set a floor and ceiling: take at least $X, but no more than $Y, depending on portfolio growth. Your job isn’t to guess the future. It’s to build flexibility into your plan. That means having cash on hand for the first year or two, so you don’t have to sell stocks when prices are low. It means knowing when to cut back on travel or dining out if your portfolio takes a hit. And it means understanding that your retirement income, all the money you receive each year from savings, Social Security, pensions, or part-time work. isn’t just from your investments—it’s a mix of sources.

What you’ll find below are real examples of how people have handled this. Some used tools to stress-test their numbers. Others adjusted their spending after a market dip and stayed on track. A few learned the hard way that a 5% withdrawal rate didn’t hold up when inflation hit. These aren’t theoretical guides. They’re stories from people who’ve been there—people who didn’t just follow a rule, but built a plan that fit their life.