Retirement
safe withdrawal rate
A safe withdrawal rate is the share of your portfolio you plan to spend each year in retirement. The name is a label only. No rate is guaranteed to last.
A safe withdrawal rate is the share of your savings you plan to spend each year in retirement, such as a set percent of the starting balance, adjusted for inflation. The word "safe" is a label from planning research. It is not a promise. No spending rate is guaranteed to last, because markets, taxes, health costs and lifespans all vary.
A round example. For example, if a couple holds $1,000,000 and plans to spend 3% in year one, that is $30,000. In year two they adjust for inflation. These numbers are for illustration only and are not a recommendation.
What changes the answer. Your age, other income such as Social Security, taxes on each account, giving plans and the order of market gains and losses all matter. A plan that tests several cases is more useful than one fixed number.
Why it matters to your plan. A family that gives generously needs to know how much it can give and still meet its own needs. A written spending plan helps you decide that with a clear head. See our retirement planning page.
Related terms
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