Real FIRE Withdrawal Rate You Can Rely On – Backed by Data

We used to believe the 4% rule was the golden formula for early retirement. But once we started planning for semi-retirement and looked beyond U.S. market data, the picture began to change.

Recent research shows that the real FIRE withdrawal rate looks very different once you factor in (semi) retirement periods of 40, 50, or even 60 years.

Let’s take a closer look at what the data really says — and how you can make your money last 40+ years with confidence.

What Is the Real FIRE Withdrawal Rate?

What Is a Safe Withdrawal Rate in Retirement in General? 

A safe withdrawal rate is the maximum amount you can take out — or withdraw — each year from your retirement savings invested in the stock market without running out of money before you run out of life.

A Simple Definition on the “Real” FIRE Withdrawal Rate

The term “real” refers to a data-backed percentage of your investment portfolio that you can withdraw each year during decades of early retirement—and later in traditional retirement—to ensure your nest egg lasts your entire life.

So, your real FIRE withdrawal rate — FIRE, short for Financial Independence Retire Early — tells you how much of your portfolio you can safely live on each year without running out of money in early retirement, backed by data.

Finding your ideal rate depends on your time horizon, asset allocation mix, and flexibility in spending.

How FIRE Differs from Traditional Retirement Horizons

Traditional retirement planning assumes 25–30 years of withdrawals starting in your 60s. FIRE, however, often spans 40–60 years, which adds decades of market uncertainty and inflation exposure.

But when you look at Semi FIRE or Semi FI (Semi Financial Independence), the picture changes.
In semi-retirement, you still work — but fewer hours, often in a less stressful or part-time job — which provides valuable financial flexibility.
And that flexibility is golden when it comes to designing your withdrawal strategy. Let’s see how.

The 4% Rule

Where It All Began

The 4% rule was first introduced by financial planner William P. Bengen (known as “Bill” Bengen) in 1994 and later confirmed by the prominent Trinity Study in 1998. This research, based on U.S. market data, showed that retirees could safely withdraw 4% annually from their investment portfolio for about 30 years with a very high probability of not running out of money. This 4% withdrawal rate quickly became the go-to rule for retirement planning.

Explore all the details on the 4 % rule in our previous in-depth post on what a safe withdrawal rate in retirement really means and how it’s calculated. You may be surprised by what we found.

Does the Classic 4% Rule Really Fit FIRE?

The 4% rule was built for traditional retirees in the U.S., hoping to enjoy up to 30 retirement years, not for those planning decades longer (semi) retirements. When you extend the time horizon to 40+ retirement years, even small variations in returns or inflation can drastically affect portfolio survival, often making it wise to lower your withdrawal rate. Or does it?

The Impact of Inflation on Your FIRE Withdrawal Strategy

General retirement advice assumes you’ll adjust all your withdrawals for inflation each year. But you may not need to adjust all of your spending for inflation during (semi) retirement.
For example, we know people on a FIRE journey who plan to keep their 30-year fixed-rate mortgage throughout retirement — an expense that doesn’t need inflation adjustments.
Other examples include lifetime subscriptions, public library or museum memberships, and insurance policies with guaranteed rates, such as life insurance.

In a Money with Katie episode featuring Bill Bengen, he explained that the 4% rule is already conservative because it assumes you’ll adjust every expense for inflation each year in retirement — which, as mentioned earlier, may not always be necessary.
Bengen clarified that his original rate was actually 4.15%, not 4%, which he later updated in his latest book to 4.7% — the “SAFEMAX” — after adding more asset classes to the benchmark portfolio.
This 4.7% withdrawal rate, like the original rule, held up even under worst-case scenarios of low stock market returns and high inflation across a significant portion of the 30-year retirement period.

Note that we still talk about a 30-year retirement in the U.S.

Semi-Retirement and the Real FIRE Withdrawal Rate

How Semi-Retirement Affects Your FIRE Withdrawal Rate

Semi-retirement gives you valuable financial flexibility — you’re still earning some income, which means you don’t have to rely entirely on your portfolio and the passive income it provides. That extra breathing room is incredibly powerful when it comes to shaping a sustainable withdrawal strategy.

Explore all the different Semi-FI approaches in our dedicated post on all types of FIRE.

Not every semi-retirement strategy involves making withdrawals. In fact, one of the most popular Semi FI options, Coast FIRE, requires no withdrawals at all until full retirement. You can be semi-retired without touching your investments, allowing those to keep growing while you cover expenses with part-time or alternative income.

On the other hand, another popular Semi FIRE strategy — Barista FIRE — is built around earning passive income from your investments for decades, typically involving withdrawals over 30–40+ years.

So, if you’re following one of these paths that lets you enjoy passive income for 30–40+ years, how does that affect your safe withdrawal rate?

Should You Always Lower Your Withdrawal Rate During Semi-Retirement?

Yes and no — opinions on this vary widely.

Some FIRE withdrawal rate advice suggests lowering your safe withdrawal rate (SWR) to account for longer retirement horizons and market uncertainty — especially if you can’t skip inflation-adjusted withdrawals because you rely on them for living expenses.

If you start making withdrawals early and expect your retirement to last far beyond 30 years, your safe withdrawal rate may be slightly lower than the classic 4% (see table below for details).

A smaller initial withdrawal helps reduce sequence-of-returns risk, as Michael Kitces explained (as introduced in our previous withdrawal rate post — see reference at the end).
Kitces is a highly respected financial planner, best known for his in-depth analysis of retirement planning and safe withdrawal rates. He also runs the popular blog Nerd’s Eye View, where he shares data-driven insights on retirement income strategies.

That smaller initial withdrawal gives your portfolio more time to grow and recover from market swings, since you cannot pause or skip inflation-adjusted withdrawals during downturns.

Over time, as your work income decreases, you can gradually increase withdrawals — particularly after the first decade of retirement has passed.

How Low Your FIRE Withdrawal Rate Should Be

Here’s Michael Kitces’ advice in short — based on U.S. market data:
If you add 10–15 years to a standard retirement, you should lower your initial withdrawal rate by roughly 0.6%.

What’s most surprising is that a portfolio lasting 40–45 years, with the withdrawal rate reduced by just 0.6%, is also likely to survive 50 or even 60 years without needing to lower the withdrawal rate any further.
In a Mad Fientist episode (a respected voice in the FIRE community) and his related post on the safe FIRE withdrawal rate, Kitces explains why the SWR doesn’t need to keep declining as the time horizon extends.

Kitces found that 3.5% forms a practical floor for a safe withdrawal rate, even for very long retirements — though this is still based on U.S. market data alone.

When to Raise Your FIRE Withdrawal Rate

However, Brandon Ganch (The Mad Fientist) and Nick Maggiulli found that you can actually raise your withdrawal rate to 4.25–4.75% if you cut back on non-essentials like dining out (about 10–20% of most budgets) during market downturns — see reference here.
If your discretionary spending is already under 10%, sticking with the 4% rule remains the safer choice.

A Lower SWR Means a Higher FIRE Number — or Does It?

Not necessarily. A lower safe withdrawal rate usually increases your FIRE number, but the full picture depends on factors like side income, taxes, and how long your money needs to last.

Michael Kitces highlights what many consider the essence of semi-retirement: Work a few hours a week on something you genuinely enjoy during (semi) retirement for as long as possible.

Even earning around 10,000 per year reduces the need to withdraw an additional ≈ 833 per month, ultimately requiring ≈ 262,000 less in invested capital, based on the 4% rule that can define your FIRE number. Or, in other words, your earned income can offset the need to increase your FIRE number.

Want to explore your FIRE number based on your withdrawal rate of choice? Discover the basics in our free FIRE Calculator and find out your personal safe withdrawal rate and path to financial independence.

The FIRE Withdrawal Rate for Retirement Periods of 40-60 years

_{* For 40+ years choose between a 4.25 – 4.75 % rate if you could cut down on discretionary spending during downturns, assuming a 80/20 stock/bond US portfolio allocation — see Brandon Ganch’s & Nick Maggiulli’s simulations.}

_{** For 40+ years calculate with an initial 3.5 % withdrawal rate to reduce the sequence of return risk (as Michael Kitces suggests — mentioned above)}

_{*** For 40 years use an initial 3.5 to 3.7 % SWR and then adjust upwards for inflation if you want to have a success rate of (almost) 100 % and your portfolio has an allocation of 75/25 US stock/bond (or 100 % US stocks). For 50 years use a 3.4 to 3.5 % SWR for a success rate of almost 100 % for the same portfolio — see Baptiste Wicht.}

_{**** For 50 years an initial 3% rate adjusted for inflation seems safe — portfolio 50 % US stocks / 50 % US bonds, as Bengen’s original paper showed}

_{***** For up to 60 years, a portfolio with 75–100% US stocks and the remainder in bonds achieved a 97–100% success rate with a 3.5% withdrawal rate, adjusted for inflation. If you plan for 40 years, the same portfolio and a 3.5% SWR show a 100% success rate, while increasing the rate to 3.75% still maintains a success rate of at least 97%.}

In short: Early retirees in their 30s or 40s should plan on a 3–3.5% FIRE withdrawal rate to stay safe over longer retirement spans and U.S.-based portfolios of 75–100% stocks with the remainder in bonds.

Baptiste Wicht reminds us that while stocks can boost your portfolio’s long-term success, they are also more exposed to sequence-of-returns risk — a point also emphasized by Michael Kitces, as mentioned above.
He talked about the concept of the “worst duration” — the point at which the first portfolio failure can occur — and discovered that 100% stock portfolios perform the worst under this measure.
His recommendation: aim for a balanced allocation, such as a 75/25 U.S. stock-to-bond portfolio.

Karsten Jeske’s results confirm the same pattern: the more bonds, the worse for longer retirement periods. 75 to 100% stocks give the highest success rates among all portfolio types for all retirement periods but only at a lower withdrawal rate than 4%, ideally 3.5%. With the 4% rule success rates drop to 85-93%.

Interestingly, Karsten Jeske’s research supports Michael Kitces’ findings — as explained above — showing that the 3.5% SWR doesn’t need to keep declining as the retirement horizon extends. It represents the practical floor for a SWR, no matter how long the retirement period, just as Kitces described.

Our FIRE Withdrawal Rate Example and Semi-Retirement Plans

Our Semi-FIRE Number & FIRE Number

Right now, we happily live on around 3,300 Euro per month — or roughly 40,000 Euro a year — not including our 1,800 Euro mortgage. We shared our full 5K Monthly Budget Breakdown For Our Family Of 5 in another post. However, we expect our living expenses to rise again once we reach semi-retirement due to inflation, and even slightly before, to around 4,000 per month — or roughly 48,000 a year.

That’s why we currently plan to build a stock market portfolio of about 500,000–600,000 Euro, representing roughly 50% of our full FIRE number (estimated at 1,000,000–1,200,000 Euro) before entering semi-retirement.

To calculate our FIRE number, we multiply our total annual spending of 40,000-48,000 by 25 — that’s how we calculate our FIRE number if using the 4% rule (more below).

In other words:
40,000 × 25 = 1,000,000 → FIRE number / 48,000 × 25 = 1,200,000 → FIRE number

This approach of accumulating 50% of our full FIRE number before stopping investing, aligns perfectly with the Flamingo FIRE strategy — a semi-retirement concept I explained in a separate post that also includes a free Flamingo FIRE Calculator.

In another post, I shared how we chose to pursue semi-retirement without pushing our dream of true early retirement too far into the future — or at least to keep the option of full FIRE open.

Will We Start Withdrawing Money When We Hit Semi-Retirement?

I’ve also mentioned in previous posts that I still feel like there’s a missing piece in our semi-retirement puzzle, and I hope to figure it out soon. So far, we’re huge fans of the Flamingo FIRE approach to semi-retirement.

However, for now, our plan looks like this:
We don’t plan to start withdrawing money when we hit semi-retirement. We might begin once we reach our full FIRE number of 1,000,000–1,200,000 Euro — but maybe we won’t.

You see, our full FIRE age is still about a decade away, or even more. It’s hard to predict where we’ll be professionally or personally by then. Maybe our earned income will still be enough to support our family. Maybe we’ll be doing work we love so much that we won’t want to quit. That’s my ideal scenario. And if that’s the case — why start withdrawing?

Our FIRE Withdrawal Rate

To be honest, Marc and I haven’t agreed on a set withdrawal rate yet, but we both know we prefer flexible withdrawal strategies. Our portfolio is currently focused on the U.S. market, though we’re gradually increasing exposure to global stocks. We don’t hold bonds, bills, gold, or other commodities, but I especially value having cash reserves before entering FIRE.

Another uncertainty is whether we’ll be able to keep and rent out our house during FIRE — and what our exact state pension will look like. You see, there’s just too much uncertainty to commit to a fixed withdrawal rate a decade ahead. But I’m very relaxed about it — we’ll see how things evolve.

Taxes, Fees, and Real-World Friction

We personally need to pay taxes once we start withdrawing money from our stock market portfolio. Do you? It’s important to remember that even a 1% annual fee or tax drag can shorten your portfolio’s longevity by several years.

Accounting for management costs, fund expenses, and capital gains taxes gives you a more realistic view of your true FIRE withdrawal rate. Always plan withdrawals based on net returns, not just nominal averages.

For instance, you can use our free Flamingo FIRE Calculator for example to account for taxes and fees, offering a more realistic view of your compounding rate after drag — typically still 0.5–1.5% for low-cost portfolios.

Dr. Wade Pfau (a US professor from Princeton University currently teaching in Tokyo, Japan) explained that a 50/50 U.S. stock-bond portfolio over a 30-year retirement had an 84% success rate with 1% fees, 65% with 2% fees, and 96% when no fees were applied. The takeaway is simple — the lower your investment fees, the longer your portfolio can last if using the 4% rule.

Flexibility Is Key: Beyond Static Rules

Static withdrawal rates like 4% or 3.5% work on paper but ignore real-life changes. That’s why we wrote about dynamic strategies — such as Guyton-Klinger guardrails or variable-percentage withdrawals — which all adjust spending based on market performance. Flexibility protects your portfolio during downturns and allows you to enjoy higher spending in strong years.

FREE Withdrawal Calculator

Use our free Retirement Withdrawal Strategy Calculator to explore multiple withdrawal strategies using historical market data.

Conclusion: The Future of Real FIRE Withdrawal Rates

The 4% rule was a great starting point, but the future of real FIRE withdrawal rates lies in adaptive and flexible withdrawal strategies. By blending data-driven planning with real-world flexibility, you can enjoy financial independence without fear of running out of money. Test your numbers with our free FIRE Calculator to see how your plan holds up over decades.

Further Resources to Study Your Ideal FIRE Withdrawal Rate

• William Bengen’s original 1994 article “Determining Withdrawal Rates Using Historical Data” (Journal of Financial Planning 7, 4 (October): 171-180)
• Bengen’s 2025 book A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More,” he introduces the 4.7% “SAFEMAX“
• Michael Kitces papers
• Brandon Ganch (The Mad Fientist) withdrawal strategy research
• Money with Katie episode Bill Bengen
• Baptiste Wicht’s Updated Trinity Study with more withdrawal rates
• Karsten Jeske’s paper “Safe Withdrawal Rates: A Guide for Early Retirees”

Your path to financial independence starts with one key number — your safe withdrawal rate. Begin your journey toward financial freedom today with our free Retirement Withdrawal Strategy Calculator.

If this post sparked new ideas for your own FIRE journey, subscribe to our newsletter below to stay connected — and share your thoughts in the comments. I’d love to hear from you!