How much can you safely withdraw from your retirement corpus?
TL;DR: The maximum sustainable withdrawal rate for a retirement corpus depends on your specific expected return, inflation assumption, retirement horizon, and any legacy target — it is not a single universal percentage like "4%". The right way to find it is to solve directly: run your corpus at increasing withdrawal rates until you find the exact rate that exhausts it right at the end of your horizon (or leaves your target legacy amount), rather than relying on a rule of thumb developed under different market conditions and a different time horizon than yours.
Where the "4% rule" actually came from
The commonly cited 4% figure originated from historical U.S. market return research testing a 30-year retirement horizon with a specific stock/bond portfolio mix. It's a genuinely useful STARTING reference point, not a law of nature — a different country's market history, a different asset allocation, a different inflation environment, or a retirement horizon longer or shorter than 30 years can all produce a meaningfully different sustainable rate.
The four inputs that actually determine your number
- Expected return — a higher expected portfolio return directly raises the sustainable withdrawal rate, and vice versa.
- Inflation — since withdrawals typically need to grow with inflation to maintain purchasing power, higher inflation lowers how much you can sustainably withdraw in real terms.
- Horizon — a 40-year retirement horizon supports a meaningfully lower sustainable rate than a 20-year one, all else equal.
- Legacy target — wanting to preserve a meaningful end balance (rather than "spending to zero") lowers the sustainable withdrawal rate accordingly.
How to solve for your actual number
Rather than starting from 4% and hoping, the direct approach is: pick a withdrawal amount, simulate the full corpus path at your expected return and inflation over your specific horizon, and check whether it depletes before the horizon ends (or falls short of your legacy target). Adjust the withdrawal amount up or down and repeat until you find the exact rate that just barely survives — this is a straightforward binary search, and it produces a number built entirely from YOUR assumptions rather than someone else's market history.
A worked comparison
| Scenario | Illustrative sustainable rate |
|---|---|
| 7% return, 6% inflation, 30-year horizon, spend to zero | Materially different from 4% — the specific combination of return and inflation assumed matters more than any fixed rule |
| Same assumptions, 40-year horizon instead of 30 | Lower — a longer horizon needs a smaller annual draw from the same corpus |
| Same assumptions, with a meaningful legacy target | Lower still — preserving an end balance means not fully spending down the corpus |
The exact numbers depend entirely on your inputs — the point isn't a specific percentage, it's that the "right" rate moves meaningfully with assumptions that are different for every retiree.
Solve your exact number
Our Retirement Income & Drawdown Report solves your maximum sustainable annual spending directly — by binary search against your entered corpus, return, inflation, horizon and legacy target — alongside the exact corpus required if you already know your desired spending.
Frequently asked questions
Is the 4% rule still accurate?
It's a reasonable starting reference point derived from specific historical market conditions and a 30-year horizon — but it's not personalized to your expected return, inflation assumption, retirement horizon, or legacy goals, all of which can meaningfully change the actual sustainable rate for your situation.
How is the maximum sustainable withdrawal rate actually calculated?
By solving directly rather than guessing — simulating the corpus at a candidate withdrawal rate over your specific horizon and return/inflation assumptions, then adjusting up or down until you find the exact rate that depletes the corpus right at the end of the horizon (or meets your legacy target), typically via a binary search.
Does a longer retirement horizon always mean a lower withdrawal rate?
Generally yes, all else equal — the same corpus has to stretch across more years, so the sustainable annual amount as a percentage of the corpus is typically lower for a 40-year horizon than for a 20-year one.
How does wanting to leave an inheritance affect my sustainable withdrawal rate?
It lowers it — if you want to preserve a meaningful end balance rather than spending the corpus down to zero, you need to withdraw less each year to leave that target amount intact at the end of your horizon.