Is a Safe Retirement Withdrawal Rate Below 4% or Almost 6%?

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• Europeans report higher well-being than Americans despite smaller homes because walkable neighborhoods reduce pressure on home as primary living space

  80% confidence

• Safe withdrawal rate for new retirees is 3.9% based on 2025 research using forward-looking market return estimates

  80% confidence

• Using base case spending system of 3.9% withdrawal tends to leave big leftover balances, meaning retirees dramatically underspend during their lifetimes

  80% confidence

• Having safe assets to withdraw from and ability to rein in spending during market downturns are two key strategies to address sequence of returns risk

  80% confidence

• The One Big Beautiful Bill will reduce average household tax bill by $3,700

  80% confidence

• RMD method is efficient but creates high spending volatility, making it most appropriate for people with significant non-portfolio income like pensions

  80% confidence

• Happiness peaks in households of four to six people, regardless of home size

  80% confidence

• Forward-looking assumptions expect potentially rough sledding in equities over next ten years due to high valuations, but 30-year period should be more or less normal

  80% confidence

• A well-diversified portfolio supports a 4.7% starting withdrawal rate

  80% confidence

• The highest starting withdrawal rate of 3.9% corresponds with a 20% to 50% equity allocation

  80% confidence

• After initial satisfaction with larger homes, people's life satisfaction typically returns to baseline or even declines

  80% confidence

• Median leftover balance after 30 years with base case is 1.42 times starting portfolio, while RMD method leaves only 0.12 times starting portfolio

  80% confidence

• Sequence of return risk is highest for newly retired individuals, particularly in first five to ten years of retirement

  80% confidence

• Initial withdrawal rate as high as 5.7% is possible with certain dynamic withdrawal strategies

  80% confidence

• Withdrawal rate can be increased to roughly 5% initially if retiree is comfortable spending less in later retirement years (mid-70s, early 80s)

  80% confidence

• Aligning fixed income sources with fixed expenses is a really great strategy for retirement income planning

  80% confidence

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