Safe Withdrawal Rate For Retirement

Shawn Plummer

CEO, The Annuity Expert

What is a Safe Withdrawal Rate for Retirement?

A safe withdrawal rate in retirement is the percentage of your savings that you can withdraw each year without running out of money. This rate depends on various factors, including your retirement duration, investment returns, inflation, and spending patterns. Traditionally, the “4% rule” has been a popular guideline, suggesting that withdrawing 4% of your retirement savings annually, adjusted for inflation, should sustain a 30-year retirement.

Safe Withdrawal Rate Calculator

Annuities can offer a different approach to retirement withdrawals. They are financial products that provide guaranteed income for life. This guarantee can make annuities appealing, as they can offer higher withdrawal rates, typically between 5% and 8% annually (including after the account is depleted), without the stress of running out of money.

What Is A Safe Withdrawal Rate For Retirement?

Safe Withdrawal Rates for Different Retirement Durations

  • 20-Year Retirement: For a shorter retirement period, you might safely withdraw a higher percentage, potentially around 5% to 6% annually.
  • 40-Year Retirement: This longer duration requires more caution. A commonly suggested rate is around 3.5% to 4%.
  • 50-Year Retirement: To ensure sustainability, a lower rate, such as 3% to 3.5%, is advisable for an exceptionally long retirement.
Safe Withdrawal Rate In Retirement

Safe Withdrawal Rate by Age

  • Early Retirement (before age 65): A lower retirement withdrawal rate (around 3% to 3.5%) is recommended due to the longer time horizon.
  • Retirement at Age 65 or Later: The traditional 4% rule, adjusting for inflation, is often applied here, though some suggest 4.5% is still safe.
Safe Withdrawal Rate

Factors Affecting Withdrawal Rates

  • Investment Portfolio: A mix of stocks and bonds can influence your withdrawal rate.
  • Market Volatility: High market volatility may require a more conservative withdrawal rate.
  • Inflation: Higher inflation rates can erode purchasing power, necessitating a lower withdrawal rate.

Safe Withdrawal Rates by Retirement Duration

Retirement DurationSuggested Safe Withdrawal Rate
20 years5% – 6%
40 years3.5% – 4%
50 years3% – 3.5%
Safe Withdrawal Rate By Age


Choosing a safe withdrawal rate is crucial for financial security in retirement. It varies based on the length of retirement and personal circumstances. Understanding these nuances ensures a balance between preserving your wealth and enjoying your retirement years. Contact us today for a free quote.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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