The safe withdrawal rate is the share of your retirement portfolio you can withdraw each year, adjusted for inflation, with a low chance of depleting it over a long retirement. The classic guideline is about 4%, implying a nest egg of roughly 25 times annual spending.
A lower rate adds safety for very long retirements or uncertain markets; a higher rate raises the risk of running short. Market-simulation tools can estimate the success odds at any chosen rate.
Related terms: Standard Deduction · Escrow