Safe withdrawal rate
The share of your savings you can spend in the first year of retirement, then adjust for inflation, without running out.
The best-known figure is 4 %, from US data over 30-year retirements. Early retirees need their money to last 40 years or more, so 3 to 3.5 % gives more margin. No rate is safe in every scenario; flexibility in bad years matters as much as the starting rate.
Tools that use it
Related terms
- 4 % ruleA rule of thumb that you can spend 4 % of your savings in year one and adjust for inflation, and the money has historically lasted 30 years.
- Sequence-of-returns riskThe risk that bad market years early in retirement do lasting damage, because you sell investments at low prices to live.
- GuardrailsA withdrawal method that spends a little less after bad years and a little more after good ones, within set limits.
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The numbers
The 4% rule, and why 3.5% is safer for Swiss early retirees
The 4% rule comes from US data over 30 years. Early retirees need longer horizons, so 3.5% is the safer start. What the rule says and what it does not.