Morningstar has declared a 4% withdrawal rate is once again safe. In an annual “state of retirement income” (here, registration required)
An accompanying article can be read here
An accompanying article can be read here
But for people who are about to retire, the prospects for retirement income look a bit brighter. In our newly released research paper, “The State of Retirement Income 2023,” my co-authors Christine Benz, John Rekenthaler, and I estimate that retirees drawing down income from an investment portfolio can now afford to withdraw as much as 4.0% as an initial spending rate, assuming a 90% probability of still having funds remaining after a 30-year time horizon. That figure is the highest safe withdrawal percentage since Morningstar began creating this research in 2021. (The highest starting safe withdrawal rate based on similar assumptions was 3.3% in 2021 and 3.8% in 2022.)