Recent research shows that married retirees withdraw about 2.1% of their savings annually, while spending 80% of their guaranteed income, such as Social Security.
Morningstar’s latest analysis suggests that retirees can safely withdraw 3.9% to start, closer to the classic 4% annual withdrawal rule.
Those willing to adjust expenses based on market conditions can take up to about 6%.
In December 2025, Morningstar Research raised its recommended safe withdrawal rate to 3.9%, up from 3.7% the previous year. But actual retiree behavior tells a different story.
The Morningstar figure comes close to the 4% rule, which is one of the most famous in personal finance: it’s the percentage of your retirement savings you should withdraw in your first year. After each year, you adjust the percentage for inflation, and, if you have enough savings, your money should last for your retirement. But recent research shows that many retirees aren’t even close to this traditional guideline.
A study in 2025 Financial planning review By David Blanchett and Michael Finke Married 65-year-olds with at least $100,000 in assets withdraw only 2.1% per year from their retirement accounts. Single retirees also take less, about 1.9%. Meanwhile, retirees spend about 80% of their guaranteed income, such as Social Security, but only half of their retirement savings.
The result is that most people fear they won’t have enough for retirement, with many retirees living more frugally than they need to, potentially missing out on a lifetime of savings. But for others, the low withdrawal rate isn’t unreasonable — it’s prudent based on the math to try to float a retirement with less.
We’ll walk you through what you need to know below.
Reviewing the accounts of 70,000 retirees age 60 and older, Vanguard’s findings reveal just how cautious—and inconsistent—how many retirees are withdrawing:
Only about a third withdrew money during each of the years Vanguard reviewed, and only 20% of that group maintained a steady withdrawal rate of between 3% and 10% annually.
The median retiree in Vanguard’s sample had a 401(k) balance of $133,000 at retirement, about 2.2 years of income. It’s no surprise that those who cashed out completely tended to have smaller balances and less income before retirement.
That $133,000 median balance is an important detail. At a traditional 4% withdrawal rate, that provides about $5,300 a year—handy for paying the bills, but not nearly enough to fund retirement. For retirees with more modest retirement savings, prudent spending is not a psychological quirk but a prudent approach with limited resources.
Analyzes calling for retirees to spend more tend to reflect wealthier families with 401(k) account balances in the high six figures or more, rather than more typical Americans who rely almost entirely on Social Security for their retirement.
According to the 2025 Employee Benefits Research Institute (EBRI) survey, nearly half (46%) say they spend less than they could because they worry about running out of money.
This helps explain why guaranteed income changes retirement spending so dramatically: 65- to 69-year-old retirees with $100,000 to $500,000 in savings withdraw only 2.7% annually if their guaranteed income (Social Security or pension) were between $25,000 and $35,000.
Those with guaranteed income above $50,000 took back 6.0% — more than double. The security of a big “paycheck” seems to “allow” them to tap their savings.
Retirees often spend much less from savings than economic theory predicts. For many Americans, this is because they have less savings. But others spend less because of a “tendency to view withdrawals from savings as losses,” according to Blanchet and Finke. Experts call this the “decumulation paradox.”
If 2% is probably too conservative for some, then what is a safe withdrawal rate?
Morningstar’s 2026 State Retirement Income Report suggests that 3.9% is a reasonable starting point for retirees looking for a 90% chance it won’t expire in 30 years. The analysis assumes a balanced portfolio (about 30% to 50% in stocks) and constant, inflation-adjusted withdrawals.
But retirees willing to be flexible can withdraw significantly more. Morningstar tested several strategies that adjust expenses based on market performance. Two approaches, the report argues, could trigger withdrawal rates as high as 5.7%:
constant percentage method: You withdraw a fixed percentage of your portfolio balance every year. If your portfolio declines by 20%, your withdrawals will also decline by 20%. If it goes up, you get a raise. This method includes a floor so your income is never less than 90% of your initial withdrawal.
settlement method: You withdraw a percentage based on the average value of your portfolio over the last 10 years. This will smooth out year-to-year swings, but your income will still vary.
The trade-off is some unpredictability, so these strategies will likely work best for retirees whose Social Security and pension income already cover essential expenses, such as housing, food, and health care.
If your fixed costs are covered, volatile portfolio withdrawals are easier to accept because you’re funding travel and hobbies, not necessities like your electricity bill.
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