Motley Fool Money Is the Retirement Safe Withdrawal Rate Below 4% or Almost 6%?
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Jan 10, 2026 
Christine Benz, Director of Personal Finance at Morningstar and co-author of a key retirement report, discusses crucial strategies for navigating retirement finances. She reveals Morningstar's 3.9% safe withdrawal rate and warns about sequence-of-returns risk for new retirees. Benz also advocates for dynamic withdrawal strategies and aligning fixed income with expenses, emphasizing the importance of flexible planning. Additionally, she highlights how spending less later can enable more initial withdrawals, making life more financially secure.
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Base-Case Safe Withdrawal Rate Is 3.9%
- Morningstar's base-case safe withdrawal rate for new retirees in 2025 is 3.9%.
- That equals $39,000 on a $1,000,000 portfolio and reflects conservative, inflation-adjusted paychecks.
High Valuations Lower Expected Returns
- Morningstar's forward-looking return assumptions are lower due to high equity valuations after recent U.S. gains.
- That reduces expected returns especially over the next decade, affecting safe withdrawal calculations.
Lower Equity Weighting Can Support Withdrawals
- The highest starting withdrawal rate in Morningstar's simulations corresponds to a light equity mix (20–50%).
- With better fixed-income yields today, retirees can meet many paycheck needs from safer assets.