Withdrawal rate
Personal FinanceDefinition
Percentage of portfolio drawn down each year in retirement. The single biggest determinant of portfolio sustainability. Higher = riskier of premature depletion.
Conservative: 3-3.5%. Standard: 4%. Aggressive: 5%+. Dynamic withdrawal rules (Guyton-Klinger, vary based on portfolio performance) generally outperform static rules in stochastic simulations.
Conservative: 3-3.5%. Standard: 4%. Aggressive: 5%+. Dynamic withdrawal rules (Guyton-Klinger, vary based on portfolio performance) generally outperform static rules in stochastic simulations.