Safe Withdrawal Rate
The rate at which you can withdraw from a portfolio each year with a high probability it will last through retirement.
The safe withdrawal rate is the pace of spending a portfolio can sustain over a long period without running out. The 4% rule is the best-known example, though the appropriate rate depends on time horizon, asset allocation and market conditions.
Examples
- Some early retirees choose a more conservative 3–3.5% to account for longer horizons.