Experts Have Challenged 8% Retirement Withdrawal Advice

Financial researchers say an 8% withdrawal rate could risk depleting your portfolio during market downturns.

Updated on Oct. 10, 2026 in Financial Planning

Gouache-painted illustration of a steel safe with a stack of coins on top, representing sustainable retirement savings planning. — Financial researchers now suggest that an 8% annual retirement withdrawal rate is too aggressive, recommending a safer 3.9% to 4.7% range instead. AI Illustration. Upload story photo >

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Financial researchers recently challenged a popular 8% annual retirement withdrawal recommendation. Studies indicate that a safer starting withdrawal rate for most retirees is significantly lower, between 3.9% and 4.7%.

Why it matters

The 8% recommendation relies on an assumed 12% annual market return, which experts argue leaves portfolios vulnerable to depletion during early market declines. Using higher withdrawal rates increases the risk that account balances will not last throughout a long retirement.

A $1 million portfolio would provide an $80,000 first-year withdrawal at an 8% rate, yet researchers define safe starting rates at 3.9% to 4.7% for most households. The exact impact depends on sequence-of-returns, where early market declines can disproportionately reduce account balances.

The players

Dave Ramsey

A financial personality who offers advice on debt reduction and retirement planning.

Morningstar

An investment research firm that provides data and guidance on retirement income strategies.

William Bengen

A financial researcher known for developing the 4% rule for retirement portfolio withdrawals.

The details

Researchers use modeling based on historical market data to calculate how much a retiree can safely spend annually. While an 8% rate assumes consistent high returns, flexible approaches suggest adjusting spending based on portfolio value. Morningstar recommends subtracting guaranteed income from Social Security and pensions before determining the necessary withdrawal percentage from your investments.

William Bengen created the 4% withdrawal guideline in 1994.
Bengen raised his withdrawal rate to 4.5% in 2005.
Morningstar set a 3.3% safe withdrawal base case in 2021.
Bengen published a book raising the rate to 4.7% in 2025.
Morningstar published its State of Retirement Income report in 2026.

Money Landscape

The debate over withdrawal rates is central to retirement planning, often measured against William Bengen's 1994 4% withdrawal guideline. Current research seeks to update this standard by incorporating modern market data and flexible spending strategies.

Review your retirement budget to see if your current withdrawal rate aligns with findings between 3.9% and 4.7% rather than higher benchmarks. Consider discussing your withdrawal strategy with a qualified financial professional to determine a sustainable pace based on your specific portfolio.

The takeaway

The primary insight is that withdrawal rates significantly impact the longevity of your retirement savings when markets underperform early in your retirement. A safe practice is to calculate your total portfolio and evaluate your spending needs with a professional to ensure your plan remains sustainable.