3% vs 4% vs 5%: How Long Will Your Retirement Portfolio Actually Last?

“How much of my portfolio can I actually spend each year without running out?” The answer doesn’t land cleanly on 3%, 4%, or 5%. A single percentage point sounds trivial, but 30 years later it produces completely different outcomes — in some scenarios your portfolio ends up larger than when you started; in others, it’s gone in 20 years.

This isn’t an article that declares 4% the universal answer. Depending on how long your retirement lasts, which country’s market history you’re drawing on, and how much flexibility you have to cut spending in a bad year, a genuinely safe withdrawal rate can swing anywhere from the low 3% range to the high 5% range. Here’s that range in numbers, plus a framework for finding your own.

What a Withdrawal Rate Actually Is, and Why 3%, 4%, and 5% Matter

Withdrawal rate = first-year withdrawal amount ÷ portfolio value at retirement. The standard model withdraws that percentage in year one, then increases the dollar amount by inflation every year after. It’s a fixed real spending plan, not a fixed percentage.

Take a $750,000 portfolio: a 3% withdrawal rate starts at $22,500 a year, 4% starts at $30,000, and 5% starts at $37,500. A $7,500 annual gap between 3% and 5% might not sound dramatic — but compounded (or rather, un-compounded) over 30 years, it changes the entire trajectory. And every figure in this article is pre-tax. What you actually keep depends on the tax rules where you live, which this article intentionally doesn’t touch.

The person who formalized this concept was financial planner William Bengen in 1994. He looked at the worst possible retirement start date in U.S. market history and asked: what’s the highest withdrawal rate that would have survived 30 years even from that starting point? He called it SAFEMAX, and the answer was 4.15% — later rounded down and popularized as “the 4% rule” (Bengen 1994, Journal of Financial Planning). The reason 3%, 4%, and 5% get compared side by side is simple: somewhere in that range, the historical outcome shifts abruptly from “almost always works” to “fails roughly a third of the time.”

30-Year Success Rates by Withdrawal Rate — 3% vs 4% vs 5% vs 6%

The short answer: 3% and 4% withdrawal rates have a 100% historical 30-year success rate, while 5% drops to 70% and 6% falls to 46%.

Source: Bengen 1994, Cooley, Hubbard & Walz 1998 (Trinity Study), Pfau’s 2018 update

Why does the number fall off a cliff at 5%? The main driver is sequence of returns risk. Even when the long-run average return is identical, a downturn in the first few years of retirement forces you to sell assets at depressed prices to cover living expenses — which shrinks the base for future compounding. Looking across historical retirement scenarios, a 4% withdrawal generally has enough cushion to absorb a rough opening stretch. At 5%, that cushion largely disappears. The lower the withdrawal rate, the wider the margin for error.

Safe Withdrawal Rate by Retirement Length — This Is the Core of the Decision

“The 4% rule” is really shorthand for “the 4% rule for a 30-year retirement.” Change the horizon, and the number changes with it. The short answer: the longer your retirement, the lower the safe rate — from roughly 5.1% at 20 years down to about 3.5% at 50+ years.

Stretch the horizon from 20 years to 50 years and the safe rate drops by roughly 1.6 percentage points. That sounds modest until you translate it into dollars: on a $750,000 portfolio, that’s the difference between withdrawing about $38,250 a year and about $26,250 a year — over $12,000 less, every single year. This is the trap I’ve seen trip up a lot of early-retirement plans: borrowing the “4%” figure that was validated for 30 years and applying it, unadjusted, to a 50-year plan. Play a longer game, and the rules of the game change with it.

What a 1-Point Difference Actually Costs You — Calculated Directly

Success-rate tables tell you how often a strategy worked historically, but not really why. So here’s a stripped-down arithmetic model: strip out volatility entirely, assume the portfolio grows at a constant real (inflation-adjusted) rate of return every year, and calculate exactly how many years it takes to hit zero. Withdrawals start at the stated rate in year one and rise only with inflation thereafter. The formula: n = ln[(w/r)/(w/r−1)] / ln(1+r), where w is the withdrawal rate and r is the assumed real return.

*When the withdrawal rate equals or is below the assumed real return, principal is preserved or even grows in real terms — in this volatility-free model, the portfolio never technically runs out.

It’s worth connecting this table back to the success-rate table above. A 5% withdrawal fails to reach 30 years under a 2% real-return assumption (25.8 years), just barely clears it under 3% (31.0 years), and comfortably clears it under 4% (41.0 years). That knife’s-edge positioning is exactly why the historical success rate landed right around 70%. A 4% withdrawal, by contrast, clears 35 years even under the more pessimistic 2% assumption — which is why it survived almost every historical 30-year window. One caveat: this table strips out volatility and sequence-of-returns risk entirely, so it’s a somewhat optimistic, idealized version of what real, bumpy markets deliver.

3% Isn’t Always the Right Answer Either — The Cost of Under-Withdrawing

A 100% historical success rate might make 3% look like the obvious “correct” answer. But that perfect track record has a hidden cost. In the market environments where 3% worked flawlessly, most of those retirees also ended up with dramatically more money at the end of 30 years than they started with. Money you didn’t spend isn’t automatically a safety margin — sometimes it’s just a life you could have lived a little bigger.

Morningstar’s 2026 guidance makes this trade-off explicit. If you want to fix your spending and stay on the same real dollar amount regardless of market conditions, 3.9% is their baseline. If you can genuinely follow a “guardrail” approach — cutting spending when markets turn against you — the starting rate can climb to as high as 5.7% (Morningstar 2026). That 1.8-point gap between 3.9% and 5.7% ultimately comes down to one honest question: are you actually the kind of person who cuts spending in a bad year? Answer that question before you pick a number.

The International Data: The 4% Rule Doesn’t Travel to Every Country

Everything covered so far — Bengen, Trinity — is built entirely on U.S. market data. What happens when you apply the 4% rule to other countries’ market histories? Economist Wade Pfau answered exactly this question using more than a century of data across 17-20 developed markets. The short answer: only five countries — the U.S., Canada, Sweden, New Zealand, and Denmark — historically supported a rate of 4% or higher.

Source: Wade Pfau, “An International Perspective on Safe Withdrawal Rates from Retirement Savings” (SSRN, summary)

Laid out like this, the 4% rule looks less like a universal law and more like a regional dialect of U.S. market history. It reflects how unusually strong the American stock market was through the 20th century. Countries that lived through repeated wars, hyperinflation, and market collapses couldn’t sustain the same withdrawal rate. Japan’s worst-case scenario is particularly stark: a portfolio that ran dry in roughly 3 years. If you hold a globally diversified portfolio, treating U.S. data as one reference point rather than the final answer — and building in extra margin — is the more defensible approach.

How to Choose the Right Withdrawal Rate for Your Timeline — A Checklist

Once you line up all the numbers, they collapse down to three variables.

1. Retirement length: 20-25 years, consider the 4.5-5% range; 30 years, roughly 4%; 40+ years, drop to the mid-3% range; 50+ years (FIRE), 3.5% or below is the safer starting point. If you’d rather work backward from your target portfolio size, see our piece on the 25x retirement rule.
2. Asset allocation: safe withdrawal rates tend to peak in the 50-70% stock range. For a deeper look at how to set your mix, see our guide on deciding your stock-bond allocation.
3. Spending flexibility: if you can genuinely cut spending in a bad market year, lean toward the higher end of the range. If your expenses are largely fixed, default to the lower end.

Across the retirement plans I’ve looked at, spending flexibility is the variable people most consistently overestimate about themselves. On paper, 5% looks achievable — but if you don’t actually have the willingness or ability to cut back, that plan only exists on paper. It’s also worth noting that withdrawing from a portfolio year by year isn’t the only path; taking a lump sum or converting to an annuity is a separate decision worth comparing on its own terms.

If you want to go deeper on the 4% rule debate itself, our piece on whether the 4% rule still holds up walks through three structural limitations in detail. And if you want the raw historical rolling-period data behind these numbers, see our companion piece on the history of safe withdrawal rates.

Key Takeaways

• Withdrawal rate = first-year withdrawal ÷ portfolio value, increased annually for inflation. All figures here are pre-tax.
• 30-year success rates: 3% and 4% = 100%, 5% = 70%, 6% = 46% (per Pfau’s 2018 update)
• “The 4% rule” is really “the 4% rule for a 30-year retirement” — the safe rate ranges from 5.1% (20 years) to 3.5% (50+ years) depending on horizon
• A 1-point difference in withdrawal rate translates to roughly 15-16 years of portfolio longevity under a 3% real-return assumption
• A 100% success rate (3%) isn’t automatically optimal — genuine spending flexibility can support up to 5.7%
• The U.S.-based 4% rule doesn’t generalize globally — Germany, Japan, and much of southern Europe have historically failed even below 3%
• Early retirees (FIRE) should treat 3.5% or lower as their realistic starting point

There’s no single correct number here. Plug in your actual retirement length, your portfolio’s composition, and the spending flexibility you can genuinely commit to, and the safe range narrows to somewhere between the low 3% and high 5% range. Understanding the conditions behind the number will serve you far longer than memorizing 4% as gospel.

Frequently Asked Questions

How many years, in practice, separate a 3% withdrawal rate from a 4% withdrawal rate?

Using a simplified calculation that assumes a constant 3% real return, a 3% withdrawal rate preserves principal in real terms indefinitely, while a 4% withdrawal rate depletes the portfolio in about 47 years. Real markets are far bumpier than that clean assumption, but the math explains why the gap between the two rates matters so much. Over a standard 30-year horizon, both rates have historically succeeded 100% of the time (per Pfau’s 2018 update) — the gap only becomes visible over longer horizons.

If I withdraw 5%, will my money definitely not last 30 years?

Not necessarily, but the odds drop sharply. Based on Pfau’s 2018 updated data, a 5% withdrawal rate had roughly a 70% historical success rate over 30 years — meaning about 3 times out of 10 it failed. In the worst historical case, the portfolio ran out in roughly 20 years. Push to 6% and the success rate falls further to 46%, barely better than a coin flip.

What’s a safe withdrawal rate for a 25-year retirement?

It’s reasonable to land somewhere between the 20-year figure (roughly 5.1%, Bengen 1996) and the 30-year figure (roughly 4.1%). No single study has validated exactly 25 years, so a conservative approach is to start around 4.5-4.7% and build in real spending flexibility as a buffer.

Is the withdrawal rate fixed, or should it be adjusted every year?

The standard model (the 4% rule and similar) sets a dollar amount in year one and increases it only for inflation thereafter — a fixed real withdrawal. That’s a baseline, not a mandate. Guardrail approaches that cut spending in bad years allow for a higher starting rate. We compare the alternatives in depth in our piece on whether the 4% rule still holds up.

Does asset allocation (stocks vs. bonds) change the safe withdrawal rate?

Yes, meaningfully. Safe withdrawal rates tend to peak around 50-70% stocks (roughly 4.0-4.1%), while allocations that are too conservative (20-40% stocks) or too aggressive (close to 100% stocks) tend to be lower, largely due to volatility.

Should early retirees (FIRE) use a lower withdrawal rate?

Yes. Over a 40-45 year horizon, the safe rate drops to roughly 3.5% (some research puts it at 3.3%), and for extreme early retirement scenarios of 50+ years, around 3.5% is a realistic ceiling. Applying the 30-year 4% figure directly to a much longer retirement noticeably lowers the odds of success.

This article is for general informational purposes only and does not constitute investment advice or a recommendation of any specific product. All investing carries risk, including loss of principal. The figures above are based on historical data and stated assumptions and do not guarantee future results. Tax treatment of withdrawals varies by country and individual circumstances — consult a qualified professional for guidance specific to your situation.

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