2025 Withdrawal Rate

[Beldar]

1.6%. Only because we purchased a new car in Dec. Our SS & pension income streams cover our needs, but I think we really need to amp up our BTD. I suppose we haven't shaken off that LBYM mindset.

_B

 

[Tom52]

If the number you are looking for is total $ taken out of investments during 2025 divided by the total of investment portfolio as of December 31, 2024, that number is 1.76%. The only money taken from investments were RMDs.

 

[INTJ10]

Roth conversions are NOT a withdrawal; they are transfers to a different account.
Two ways to do a Roth conversion:
1) withdraw $10,000 from tIRA, put $8500 in Roth IRA, send $1500 to IRS. You could call that $1500 a withdrawal.

2) convert entire $10,000 from tIRA to Roth and pay $1500 tax from your checking account. Definitely no withdrawal here.

Similar logic applies to folks with RMDs who invest the entire amount in their taxable account...

Okay, I stand corrected. I redid the numbers using my 1/1/25 "Stash" Balance as the denominator. Stash included IRA's and Brokerage accounts. Our Spend Rate was 3.3% of our Stash. The spend includes taxes we paid for Roth Conversions. Our Withdrawal Rate was 2.3% of our Stash. The difference of 1 % was money coming in for rental income, consulting income and a big insurance claim.

 

[N02L84ER]

It looks like 2025 was 1.2%. 2024 was 4.0% and I expect 2026 to be closer to 4% again since we have some major remodeling planned.

 

[disneysteve]

Using my final numbers, our spending for 2025 came to 3.9% of our 12/31/24 portfolio balance.

That isn't 100% accurate as I haven't adjusted for my reselling income, but I also haven't added in cash spending so those two figures probably cancel each other out. I do find that we are spending more cash than we have in years since so many places now charge extra for using credit cards.

3.9% is close enough for me. 2025 was a higher than usual spending year for us due to remodeling our kitchen so unless something happens, our 2026 WR will likely be lower.

 

[mrfeh]

1.2%

 

[SloHan]

The 2025 withdrawal was 3.75%. Been retired for seven years now and this was the first year I had withdrawn more than 1%. Did so much with the money. Delayed home repairs, travelled a bit, bought a new car and ate out much more often. Spending can be fun.

 

[Surewhitey]

3.2% of investment assets eoy 2024, but included 1/2 European trip w/kids for 2026 prepaid...

Spending was down from 2024 by ~5%.

 

[equakesfan]

Our withdrawal rate was between 1.53% and 2.62%. 1.53% is calculated by dividing our net spending/assets (excluding RE). 2.62% is calculated by dividing our gross spending (including most RE expenses) / assets excluding our home. Either way it is less than our limit of 3% of assets.

 

[NW-Bound]

My total withdrawal for 2025 was 1.7% of the portfolio balance on Jan 1, 2025. More than 1/2 of that goes to pay Fed and state income taxes, which were high due to Roth conversion up into the 24% tax bracket.

Note that I do not count the amount going into the Roth account as a withdrawal. It's just transferring money from one pant pocket to the other pocket. Only the friction loss, i.e. the resulting taxes, are counted as withdrawal (or expenses if paid with after-tax money), because the money disappears off my book and shows up in the IRS book.

I will claim SS later this year. The higher SS when claimed at 70 along with my wife's SS may be sufficient for our expenses, unless we really want to BTD (but on what?). No mortgage, no bank loans, with lots of money thrown off by the generous market god. I know many posters here are in the same situation.

 

[jollystomper]

We spent like our version of drunken sailors, but we might have to do a better job .

 

[COcheesehead]

Finished the year at 1.93% of portfolio value. 1.6% of net worth.

 

[ShokWaveRider]

In the grand scheme of things, actual withdrawal rates are somewhat irrelevant (to us) when we end the year with more than we started.

 

[COcheesehead]

In the grand scheme of things, actual withdrawal rates are somewhat irrelevant (to us) when we end the year with more than we started.

I base mine on the current value because the money coming out is still a percentage of your wealth. If I based it on my starting retirement portfolio the number would be different, but also meaningless.

 

[imjustawarrior]

2025 WR = 4.8%

This is all according to our retirement plan. The plan involved buying 3 new cars in the first 3 years of retirement. We accomplished that. 2026 should be below 3% if we don't do a Roth conversion, but we will.

This does not include college expenses covered by 529s. I don't count 529s in our portfolio.

 

[WhenIsItTime]

No way to tell until January 2027 and the final credit card bills show up.

 

[ArmchairMillionaire]

Can't officially post a 2025 full-year withdrawal rate since I still w*rked 6 months in 2025, but for the final 6 months, we took $24K ($19,200 after tax) from the 401(k) for living expenses so our withdrawal rate was a very low 1.33%.

For 2026, I was planning on taking $60K for living expenses, (3.33%) but then our ACA plan became eligible for HSA contributions, so now I'll be withdrawing $69,800 from the 401(k) (3.87%) but that extra $9,800 will go right into our HSA accounts so we'll still have $60K of income, which will leave us $48K after tax for our living expenses.

 

[Midpack]

Not meaningful for me, as I am still doing large Roth conversions. Still less than 2% in every year except since I retired 15 years ago...

We did well trying to increase spending in 2025:

Category	% change 2025/24 vs 2022/23
Entertainment/Dining	+18%
Misc (updated Trust)	+198%
Home (DW landscaping)	+42%
Travel (not vacation unfortunately)	+118%
Taxes	-29%
All Expenses	-6%
w/o Taxes & Lumpy Expenses	+18%

 

[ERD50]

... Well, my numbers are showing a negative WR for 2025. I was really surprised but I have a -.22% WR for 2025 against my total portfolio. The account where any income goes in and all expenses go out was more then the start at Jan. 1st, 2025. ...

(EDIT - I see it has been covered), oh well, I'll leave my post here anyway.

This may have been covered in the preceding 9 pages, but your -0.22% does not match the usual definition of Withdrawal Rate.

What you are describing is that your portfolio grew, even with your spending withdrawals. That's great, but it isn't a negative WR. Example:

Start of year 2025, a portfolio was $1,000,000. Over the year, $40,000 was withdrawn to cover expenses. That is a 4% WR. Period.

Maybe the portfolio had good returns, and ended at $1,050,000. That means it had $90,000 in gains, so was at $1,050,000 after the $40,000 withdrawals. But the WR is still 4%. Make sense? WR is Withdrawals divided by portfolio value, in per cent.

 

[fognostic]

We're a decade or more away from SS, so the stash is our only income source for now. That makes it tough to compare to others WR's that exclude expenses covered by SS or pensions. I used FIRECalc to solve our plan for the 100% success present value spend rate with and without a pessimistic estimate of our future social security, and I'm calling the difference the present value of our future SS income stream. Pessimistic means FRA is raised to 70, AIME is computed over 40 years and spousal benefits are eliminated as part of making SS solvent again, which would cut our SS by ~40% compared to current recipient benefit rules. Hopefully we don't take an across the board percentage cut on top of that.

Between so estimating the present value of our future SS and using something like a 2025 annual average for spend and portfolio balance:

WR = [2025 Before Tax Spend - PV SS]/[3 point average portfolio balance from Jan1, Jun 30, Dec 31)]

• ~1.9% (2.6% if PV SS is zeroed)
• Had we had to cover health insurance last year, those rates would be ~2.7% (~3.4% if PV SS is zeroed)

 

[Flieger]

It's interesting the different "opinions" on definition/calculation of WR. Yes, I know there is the "standard" or Norm.

I'm not sure what to call it, but if I take the difference between my YE 2024 Portfolio balance and my YE 2025 Portfolio Balance (numerator) and use the YE 2024 as denominator, the change was -3.0%. This would include changes in value of Portfolio due to Div's, Cap gains/(losses), etc.

Flieger

 

[Flyfish1]

I'm not sure what to call it, but if I take the difference between my YE 2024 Portfolio balance and my YE 2025 Portfolio Balance (numerator) and use the YE 2024 as denominator, the change was -3.0%. This would include changes in value of Portfolio due to Div's, Cap gains/(losses), etc.

To me that is your rate of return, not a withdrawal rate. Just take how much you withdrew divided by the account total.

 

[Flieger]

To me that is your rate of return, not a withdrawal rate. Just take how much you withdrew divided by the account total.

You are right, I'm sure. But this is what I am mostly looking at - destruction(or increase) of my Portfolio based on my WD's.

Flieger

 

[hesperus]

That's an impressive result for the year. I haven't finished my final tally yet, but I'm definitely in the positive range due to some home repairs in the fall. Ending the year with more than you started is a great position to be in.

 

[ERD50]

It's interesting the different "opinions" on definition/calculation of WR. Yes, I know there is the "standard" or Norm.

To me it's not 'interesting', it is frustrating and counter-productive.

If we are to have meaningful, productive discussions, we have to agree on the meaning of words. As the old saying goes, you are entitled to your own opinion, but you are not entitled to your own facts.

To be useful, we must consider "withdrawal" to mean funds removed from your portfolio (spent or given away). Not transferred to another fund. If you want to get into the weeds on this, I suppose there may be rare cases where a large purchase was made for a non-consumable asset that could reasonably be sold at a later date. In that case, the current sale value could be considered part of your liquid portfolio.

For consistency, the denominator is your start of year (or 12 month period) liquid portfolio value.

Your portfolio performance has nothing to do with "Withdrawal Rate" until next year's calculation, where you use the new portfolio value.

That takes more effort to put into words than it takes to just do it. We have two places where money leaves. If I sum up the debits for the year, not including any money transferred to another account (that's not 'spent', just moved), divide by my total portfolio value at the start of the year as a percent, that's it.

Any other calculation is something different, and is not apples-apples to "Withdrawal Rate".

I'm not sure what to call it, but if I take the difference between my YE 2024 Portfolio balance and my YE 2025 Portfolio Balance (numerator) and use the YE 2024 as denominator, the change was -3.0%. This would include changes in value of Portfolio due to Div's, Cap gains/(losses), etc.

Flieger

That is just what it is - the change in your portfolio value. Without going deeper, we have no clue as to the components that make that up (gains/losses, spending). It's a useful thing to track, but it is separate from WR and separate from portfolio performance. You could be up because gains exceeded losses and spend, you could be down because of losses and spend, or down because spend exceeded gains.