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If you’ve ever wondered what is a safe withdrawal rate in retirement and how much you can spend from your investment portfolio without running out of money, you’re not alone. We asked ourselves the same question when planning for semi-retirement and began rethinking the traditional 4% rule.
In this post, I’ll explain what a safe withdrawal rate in retirement really means, how the 4% rule works for different ages, what experts like William P. Bengen (known as Bill Bengen), Michael Kitces, Dr. Wade Pfau, and Prof. Scott Cederburg recommend, and how to find your own personalized number.
At the end, you’ll find all research papers and studies we reviewed to make this guide as accurate and practical as possible.
💡 Before we start. Try It Yourself – Retirement Withdrawal Strategy Calculator
Before diving into the research behind the 4% rule, expert guidelines, and international comparisons, try the math on your own portfolio. Enter your portfolio size, expected retirement horizon, and spending needs — and instantly see how different withdrawal rates perform across historical market conditions.
👉 Launch the Calculator or checkout our hands-on step-by-step guide.
What Is a Safe Withdrawal Rate in Retirement? (Definition)
So, what is a safe withdrawal rate in retirement, exactly?
Or put another way: What is the maximum income you can withdraw from your retirement savings — invested in the stock market — without running out of money before you run out of life?
A safe withdrawal rate (SWR) is the percentage of your investment portfolio you can withdraw each year in retirement without depleting your savings too soon — giving your portfolio the best chance to last your entire lifetime.
A safe withdrawal rate is always a guideline, not a guarantee — because no one can foresee how markets will evolve.
The 4% Rule Explained — the Classic Safe Withdrawal Rate
The most widely known benchmark for a safe withdrawal rate is the 4% rule, first introduced by Bill Bengen in 1994 and later confirmed by the Trinity Study in 1998 (more below).
Even today, the 4% rule remains the most common answer to the question: “What is a safe withdrawal rate in retirement?”
It assumes that retirees can withdraw 4% in the first year of retirement and then increase that amount each year by inflation to maintain spending power, and expect their savings to last roughly 30 years.
The 4% rule became famous through the prominent blog post The 4% Rule: The Easy Answer to “How Much Do I Need for Retirement?”, and it remains the foundation for most retirement planning strategies today.
Where Did the 4% Rule Come From? (Bengen and the Trinity Study)
Bengen’s Research
William P. Bengen, known as Bill Bengen, is a financial planner. In the early 1990s, he set out to answer a question that few could clearly define at the time: What is a safe withdrawal rate in retirement for my investment portfolio? With little expert guidance available, he began running his own calculations, analyzing historical returns of U.S. stocks and bonds across multiple 30-year retirement periods.
He based his analysis on data from Ibbotson Associates’ Stocks, Bonds, Bills, and Inflation (SBBI) dataset, which provides detailed historical returns for U.S. stocks, bonds, short-term treasury bills, and inflation.
Bengen discovered that a 4.15% withdrawal rate was the highest historically sustainable spending rate for 30-year retirements, based on a 50/50 mix of U.S. stocks and U.S. bonds, annual rebalancing to maintain that ratio, and funds held in a tax-advantaged account ending with a zero balance — ensuring retirees wouldn’t outlive their money.
In 1994, he published his findings in the Journal of Financial Planning (see reference at the end), concluding: “Assuming a minimum requirement of 30 years of portfolio longevity, a first-year withdrawal of 4 percent, followed by inflation-adjusted withdrawals in subsequent years, should be safe.”
The Trinity Study
The prominent Trinity Study is a 1998 research paper by Philip L. Cooley, Carl M. Hubbard, and Daniel T. Walz, all professors at Trinity University in Texas. It validated Bill Bengen’s findings on sustainable withdrawal rates (see reference at the end).
The Trinity Study also referred exclusively to the U.S. market, analyzing historical stock and bond returns based on American market data.
Although no one originally coined the term “4% rule,” it became the perfect marketing phrase to make the concept easy to remember and share.
It’s important to note that in the study, a portfolio was considered successful if it completed the entire payout period with a terminal value greater than zero — even if that meant ending with just a single dime. In general, more bonds seemed to reduce growth potential but increase stability, while more stocks raise volatility but improve long-term returns.
Many in the FIRE (Financial Independence, Retire Early) community still rely on the 4% rule because it provides a simple, time-tested framework with a high probability of long-term success.
What Is a Safe Withdrawal Rate in Retirement by Age? (Expert Guidelines)
Answering what is a safe withdrawal rate in retirement depends largely on your retirement age.
Financial planners such as Michael Kitces and professors like Dr. Wade Pfau refine the classic 4% rule among others based on both retirement length and country-specific factors.
(You can find links to their original research papers and many more at the end of this post.)
The Expert Guidelines
| Retirement Horizon / Country | Suggested SWR (rounded) | Source |
|---|---|---|
| Up to 30 years / U.S. Portfolio | 4% | Kitces, Pfau, Bengen |
| Up to 30 years / U.S. Portfolio | 4-4.7% * | Bengen |
| 15-20 years / U.S. Portfolio | 5-6% ** | Bengen |
| Up to 30 years / Domestic Portfolio (not international!) | 3.2-3.4% *** | Pfau |
| 25-30 years / Domestic Portfolio (not international!) | 2.3% **** | Scott Cederburg et al. |
** For 20 retirement years an initial 5% rate adjusted for inflation seems safe, and for 15 retirement years a 6% rate seems safe — portfolio 50 % US stocks / 50 % US bonds. A 75% stock allocation appears equally secure for the 5% rate.
*** For a 30-year retirement period and a portfolio reflecting domestic markets you can apply the median 3.22-3.36 % safe withdrawal rate, as explained down below.
**** For retirement periods of around 25-30 years and a portfolio of 60% domestic stocks / 40% bonds an initial 2.26% rate adjusted for inflation seems safe (more down below) — see Scott Cederburg et al. (2022) referred at the end.
How Fees Can Screw Up the 4% Rule — and Lower Your Safe Withdrawal Rate
“The 50-50 portfolio over 30 years with 4% withdrawals had a 96% success rate without fees, 84% success rate with 1% fees, and 65% success rate with 2% fees. This, in and of itself, is a reason to be cautious about using 4%.”, as Dr. Wade Pfau explained in his research. Pfau is a US professor currently teaching in Tokyo, Japan, who holds a Ph.D. in economics from Princeton University.
We’ve also discussed how taxes and investment fees can impact your Semi-FIRE journey inside our free Flamingo FIRE Calculator among others.
How Inflation Affects the 4% Rule & the 4.7% “SAFEMAX” — Bengen’s Findings
What is a safe withdrawal rate in retirement under today’s economic conditions?
William Bengen, often called “the inventor of the 4% rule”, considers inflation the greatest enemy of retirees. He developed his original rule during a period of mostly low and stable inflation.
Bengen points out that high inflation early in retirement or a bear market — when stocks drop more than 20% — can seriously shorten the life of a retirement portfolio.
So, what is a safe withdrawal rate in retirement when inflation runs high or markets tumble?
In Bengen’s 2025 book A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More, he introduces the 4.7% “SAFEMAX” — a historically safe withdrawal rate that held up even during long stretches of elevated inflation across a 30-year retirement. His book provides data-driven guidance on when, why, and how to adjust withdrawals to ensure your savings truly last a lifetime.
If you’d like a quick overview, I recommend reading the Investor’s Business Daily article on the updated 4% rule — where you’ll also find the ideal portfolio allocation (spoiler: it’s 55% in stocks, with only 11% international exposure) — and listening to the podcast featuring Bengen himself.
What if My Portfolio Is International?
In short: diversifying your portfolio internationally — by holding stocks and bonds from markets outside the U.S. — lowers your safe withdrawal rate, since the U.S. market has historically delivered unusually strong returns compared to others. (Remember, the original 4% rule is based solely on U.S. market data.)
We start with Scott Cederburg’s findings and then take a closer look at Wade Pfau’s research — both of which are among the widely recognized studies on this topic.
If you want to look up a sample of global SWRs, you may want to look at these portfolio charts, that use long-term real return data covering multiple developed markets and portfolio types.
Scott Cederburg’s Research (& Ben Felix Suggestions)
The 2022 study was conducted by four U.S. university professors, including Scott Cederburg, a respected expert in withdrawal-rate research. The study analyzed 38 developed countries including markets which underperformed or failed. Retirement periods were modeled flexibly, typically ranging at around 25-30 years, based on mortality tables. It compiles monthly real returns for domestic stocks, international stocks, bonds and bills across those 38 countries dating back to 1890 — domestic refers to one of 38 developed markets. Constant‑percentage withdrawal strategies were simulated.
Their simulations show that, for a 60%/40% domestic stock/bond portfolio, the safe withdrawal rate (that limits the chance of running out of money during retirement to 5%) is just 2.26% per year on average (the median across all 38 developed markets). When the 4% rule was tested, it carried about a 17% risk of depleting assets, meaning about one in six retirements would have exhausted the portfolio too soon.
Note that the 2.26% SWR on average does not refer to an international portfolio. It is the median SWR across domestic 60/40 stock/bond portfolios of 38 developed countries — not to any globally diversified or international allocation!
The SWR varies by asset mix on average: it’s about 1 % for an all‑bond portfolio, 1.64% for a 20/80 domestic stock‑bond split, 2.06% for an 40/60 domestic stock‑bond mix, 2.26% for the 60/40 domestic stock‑bond split, 2.21 % for an 80/20 domestic stock‑bond mix, and 1.85 % for an all‑stock portfolio.
Internationally diversified portfolios (domestic + international stocks and/or bonds) show modestly lower ruin risk. However, the resulting SWR uplift was typically less than 0.2–0.3%, insufficient to approach a SWR of 3%, let alone 4%.
Although not reported in the paper, adding a specific international diversification to the portfolio improves these outcomes, as respected financial planner Benjamin Felix suggests in this article. When 40% of the total portfolio is allocated to international stocks, the safe withdrawal rate increases to 2.85%. Expanding that share to 90% international stocks raises the SWR further to 3.02%.
Here’s the link to the full study for reference:
Scott Cederburg et al. (2022) –”The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets”
Wade Pfau’s Findings
In his 2010 study, Pfau analyzed annual stock, bond, bill, and inflation data from 1900 to 2008 for 17 developed countries. He evaluated each 30-year retirement window and explored various portfolio mixes to determine the maximum sustainable withdrawal rate, known as SAFEMAX. Strategies with a constant percentage withdrawal amount were also simulated here.
His results showed that the median “SAFEMAX” was 3.36 %, and the average SWR across all 17 countries was 3.22 % (median means the middle value in a sorted list of numbers — half the values are higher, and half are lower). Only a small minority of developed markets support the 4 % guideline (see below).
A simple 50/50 stock–bond portfolio failed in all countries, and the optimal portfolio mix involved higher stock exposure. The exact ideal allocation for each country can be found in the study, linked below.
For instance, here are the SWRs: Canada (4.42 %), Sweden (4.23 %), Denmark (4.08 %), the United States (4.02 %), South Africa (3.84 %), the United Kingdom (3.77 %), Australia (3.68 %), Switzerland (3.59 %), the Netherlands (3.36 %), Ireland (3.28 %), Norway (3.13 %), Spain (2.56 %), Italy (1.56 %), Belgium (1.46 %), France (1.25 %), Germany (1.14 %) and Japan (0.47 %).
Note that we are not talking about internationally diversified portfolios. No cross-border diversification was allowed (no “global portfolio”). Each of the 17 countries was analyzed individually, with retirees investing only in their own domestic stock, bond, and bill markets — for example, U.S. retirees invested purely in U.S. assets; Germans in German assets; and so on.
Pfau also noted that when realistic costs (e.g., 1% annual fees) are included, the SAFEMAX decreases by roughly the same amount, for example from about 3.59 % to 2.59 %.
Here’s the link to the full study for reference:
Wade Pfau’s 2010 paper “An International Perspective on Safe Withdrawal Rates from Retirement Savings: The Demise of the 4 Percent Rule?” (Journal of Financial Planning 23, 12 (December): 52-61)
What if My Portfolio Is 100% Stocks? — Cederburg’s Controversial Findings
Equally important when determining your safe withdrawal rate is finding the right balance between stocks and bonds.
In worst-case market scenarios, portfolios that hold more bonds than a 50/50 ratio and use an initial 4% withdrawal rate (adjusted for inflation) could deplete too early — because the more bonds you hold, the lower your growth potential and the slower your recovery after downturns.
In 2025, three U.S. university professors, including Scott Cederburg, published a controversial paper on the ideal lifetime portfolio allocation.
According to the study’s findings, the optimal allocation over an entire lifetime — including retirement — is 100% stocks, divided as follows: 67% international stocks and 33% domestic stocks.
(See the referenced paper by Cederburg et al. at the end for full details.)
If you’d like a more detailed walkthrough of the study’s results, I highly recommend watching Ben Felix’s video on the paper — as mentioned above, he’s a respected financial planner from Canada who explains the findings clearly and concisely.
Key Risks That Can Reduce Your Safe Withdrawal Rate
Longevity Risk
Plan to live 5–10 years longer than you expect. Your portfolio should outlast you, not the other way around.
Sequence of Returns Risk
The sequence of returns risk means that the order of returns matters more than the average return. If markets fall early in retirement — especially during your first 10 years — you could deplete your portfolio too soon, even if long-term averages look good.
To prevent that, Michael Kitces suggests starting with a 3–3.5% withdrawal rate for the first decade and maintaining cash reserves covering 6–24 months of expenses. This buffer helps you avoid selling stocks during market downturns.
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.
So, when times are bad, withdraw less and sell only bonds, bills, or gold so you don’t reduce the stock portion of your portfolio even further.
If possible, pause withdrawals and use your cash reserves instead — and consider buying stocks at lower prices to strengthen your long-term recovery.
Lack of Diversification
Diversification plays a key role in protecting your portfolio. We already talked about a controversial paper. A more common guideline is to hold around 75% stocks and 25% bonds, while adding gold, silver, or cash reserves for extra stability.
However, Bengen stated in his original 1994 paper that having too few stocks in a portfolio can shorten its minimum lifespan. He advised investors to maintain a stock allocation close to 75%, and never below 50%.
We’ve also seen that it’s also smart to diversify internationally — for example, through broad global funds like the MSCI World Index. (more down below)
If you’d like to explore which funds offer the best balance between safety and growth, check out our detailed guide on the Safest Index Funds for Financial Independence.
How to Adjust the Safe Withdrawal Rate in Retirement
Even the 4% rule — the classic answer to what is a safe withdrawal rate in retirement — can be made smarter with a few flexible strategies.
During bull markets:
Consider a one-time withdrawal of 5–10% to top up your cash reserves while portfolio values are high.
During downturns:
Cut discretionary spending or pause inflation adjustments to preserve capital.
How to Calculate Your Own Safe Withdrawal Rate (FREE Withdrawal Calculator)
Use our free, ultimate Retirement Withdrawal Calculator to test your own scenarios and find out what a safe withdrawal rate in retirement is for your situation.
You can stress-test your numbers with historical market data and explore multiple proven withdrawal strategies to find the optimal approach for your financial goals in retirement — and discover what is a safe withdrawal rate in retirement that truly fits your plan.
Run your numbers today using the free Retirement Withdrawal Calculator and see how long your savings could last.
Common Myths about the Safe Withdrawal Rate
Myth 1: The 4% rule only works in the US.
Reality: Global research shows that safe withdrawal rates typically range between 2.3-4.5%, depending on the local market and inflation conditions.
Myth 2: You can’t change your withdrawal rate during retirement.
Reality: Flexibility is key and frequently applied. Cutting or pausing withdrawals in bad market years can dramatically extend your portfolio’s life and improve long-term sustainability.
Myth 3: The 4% rule guarantees success.
Reality: It’s a useful guideline, not a guarantee. Market returns, inflation trends, and your individual fees (as mentioned above) all influence what a safe withdrawal rate in retirement is for you.
FAQs About Safe Withdrawal Rates
Does the 4% rule include inflation?
Yes. The 4% rule assumes that you adjust withdrawals each year for inflation to maintain your purchasing power.
Example:
If you withdraw 30,000 in your first year of retirement and inflation rises by 3%, you would withdraw 30,900 in the following year to keep your real spending power the same.
Should I lower my rate during market crashes?
Yes — and most people naturally do. During downturns, it often feels safer to spend less and use cash or bonds first, giving your stock investments time to recover.
Example:
If your planned withdrawal is 1,500 per month, you might reduce it to 500 and cover the rest using cash or bond reserves until markets stabilize.
Can I increase my withdrawal rate later?
If markets perform well and your portfolio balance grows, you can safely raise your withdrawal rate in later years.
Example:
If your 1,000,000 portfolio grows to 1,200,000, increasing your withdrawal from 4% to 4.5% would give you 54,000 per year instead of 48,000.
Final Thoughts
Historical U.S. returns were extraordinary compared to most markets and countries — but relying on them to determine your personal safe withdrawal rate, especially if your portfolio is internationally diversified, doesn’t reflect what the next few decades may bring.
The nature of safe withdrawal rates is straightforward: they’re built to survive the worst-case scenarios, not the easy ones. They won’t adapt to the world you’ll actually retire in — but you can adjust your rate.
Test flexible withdrawal strategies with our free Retirement Withdrawal Calculator today and see how your plan holds up.
Further Resources to Answer: What Is a Safe Withdrawal Rate in Retirement?
To help you dig deeper and answer this post’s question “What Is a Safe Withdrawal Rate in Retirement?”, here are the most credible research papers, expert analyses, and FIRE community insights that shaped this guide:
- William Bengen’s original 1994 article “Determining Withdrawal Rates Using Historical Data” (Journal of Financial Planning 7, 4 (October): 171-180)
- Bengen’s 2004 paper
- Bengen’s 2020 article
- Bengen’s 2025 book A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More,” he introduces the 4.7% “SAFEMAX
- “The Trinity Study”: Philip Cooley, Carl Hubbard, Daniel Walz 1998 article “Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable” AAII Journal. 10 (3): 16–21.
- Trinity study update discussions
- Michael Kitces papers
- Wade Pfau’s 2010 paper “An International Perspective on Safe Withdrawal Rates from Retirement Savings: The Demise of the 4 Percent Rule?” (Journal of Financial Planning 23, 12 (December): 52-61)
- Pfau’s 2011 paper “Retirement Withdrawal Rates and Portfolio Success Rates: What Can the Historical Record Teach Us?”
- Stanford University 2008 paper
- Scott Cederburg et al. (2022) –”The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets”
- Scott Cederburg et al. (2025) –”Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice”
- Benjamin Felix–”The 2.7% Rule: Rethinking Safe Retirement Spending”
- Todd Tresidder’s article “Are Safe Withdrawal Rates Really Safe?”
Your path to financial independence starts with one number — your safe withdrawal rate. Start your journey to financial freedom with our free Retirement Withdrawal Strategy Calculator today.
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