Safe Withdrawal Rate for 2026

Morningstar’s 2026 research puts the safe starting withdrawal rate at 3.9% — up from 3.7% last year. Here is what that number assumes, and the four things that move it for your own situation.

The 2026 number

3.9%, for a retiree who wants a fixed inflation-adjusted income and a high degree of certainty. On $1,000,000 that is $39,000 in the first year, rising with inflation thereafter.

That figure is not a rule of thumb. It is the output of a model with stated assumptions, and the assumptions are the interesting part:

• 30-year retirement. Roughly age 65 to 95.
• 90% probability of success. The plan survives in nine of ten simulated futures. It is explicitly not a guarantee, and a 10% failure rate is a deliberate choice rather than an oversight.
• 30–50% in equities, the rest in bonds and cash. Lower than most people expect, and that matters: beyond a point, more stock adds volatility faster than it adds safe income.
• Fixed real spending. You never adjust in response to markets.

How it has moved

The safe rate is recalculated each year against current bond yields and equity valuations, which is why it wanders:

The 2021 low of 3.3% came when bond yields were on the floor: a portfolio with half its weight in bonds earning almost nothing cannot support much withdrawal. The recovery since is mostly the same story running in reverse. This year's rise from 3.7% to 3.9% reflects improved capital-market assumptions rather than anything a retiree did differently.

The useful lesson is not the current number. It is that a 0.7-point swing in six years — a fifth of your retirement income — came entirely from conditions outside anyone's control, which is an argument for building in flexibility rather than precision.

What moves it for you

A longer retirement. Stretching the horizon from 30 years to 35 drops the safe rate from 3.9% to 3.5%. Retiring at 60 rather than 65 costs you roughly a tenth of your sustainable income, before you have changed anything else.

Long-term care. Once long-term-care costs are modelled for someone retiring and claiming Social Security at 67, the safe rate falls to 3.5%. This is the single most commonly ignored variable in retirement planning, and it is larger than most portfolio decisions.

Flexibility. This is the big one, and it runs the other way. Morningstar tested eight strategies that adjust spending in response to markets — skipping an inflation raise after a bad year, or trimming withdrawals when the portfolio falls below a guardrail. Those supported starting rates as high as 5.7%. Being willing to spend less in bad years is worth more than any asset-allocation decision available to you.

Fees. They come off the top. A 1% advisory fee is close to a quarter of a 3.9% withdrawal rate.

Run your own number

A published safe rate is calibrated to a hypothetical retiree. Yours has a specific balance, a specific tax rate and a specific horizon. The calculator below starts at roughly 3.9% on $1,000,000 — change the inputs and read the "to last 30 years" figure, which is your safe rate rather than the average one.

How to use a number like this

Treat 3.9% as a starting position, not an instruction. Three practical readings:

• If your plan needs more than about 5%, no reasonable investment decision closes that gap. The lever is spending, working longer, or delaying Social Security — which raises your guaranteed income permanently and is often the highest-return move available.
• If your plan needs under 3%, you are very probably underspending. The most common regret in retirement research is not running out of money; it is dying with most of it unspent.
• If you can be flexible, you are closer to the 5.7% end than the 3.9% end. Decide in advance what you would cut in a bad year, and write it down while markets are calm.

Figures cited are from Morningstar’s State of Retirement Income research for 2026, verified August 2026. This page is updated when that research is.