Safe Withdrawal Rate for 2026

By Muhammad Ejaz·Finance content creator·Updated 27 August 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.

What a longer retirement does to the number

Morningstar publishes 3.9% for 30 years and 3.5% for 35. It does not publish further out in the free summary. Retire at 50 and you are planning for 40 years or more.

So here is the same question, run through this site's own engine. Balance $1,000,000, return 5%, inflation 2.5%:

This site's engine, not Morningstar's. Constant 5% return, 2.5% inflation, no tax, balance exhausted at the end of the term. See the methodology.

The gap between those two numbers is the most useful thing on this page

Read the 30-year row against Morningstar's 3.9%. Both describe a 30-year retirement. They differ by about 0.8 percentage points, which is roughly $8,054 a year on $1,000,000.

That gap is sequence-of-returns risk, priced.

This engine assumes the 5% turns up steadily, every year, in order. Morningstar's does not. It runs thousands of market paths and reports the rate that survived 90% of them. That includes the paths where the first three years were bad. A bad first decade does damage a good average never repairs, because you sold shares to live on while they were cheap.

So use the table above for its shape, not its level.

The shape is real. Every extra five years of retirement costs you something, and the cost shrinks as the horizon grows. The step from 20 to 25 years takes about a full percentage point. The step from 45 to 50 takes about a fifth of one.

The level is optimistic by design. Any calculator that hands you a single return figure, this one included, is answering an easier question than the one your retirement will ask.

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.

Printed from https://savingslast.com/safe-withdrawal-rate-2026/ on . The figures reflect the inputs shown and the rules as published on that date.