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What’s a “safe” annual withdrawal rate?
A 4% withdrawal rate was once considered a “safe” amount that could be taken from your next egg each year, based on research done in the 1990s. However, market conditions over the past decade have called the “4% rule” into question. When determining a sage withdrawal rate, it is important to factor in how retirement savings are divided between equities and bonds.
![](https://pathwisegroup.com/wp-content/uploads/2023/03/withdrawal-001-1024x458.png)
Lower withdrawal rates require retirement nest eggs to be much larger to generate the same level of retirement income. Consider the assets required to generate $40,000 a year in income:
![](https://pathwisegroup.com/wp-content/uploads/2023/03/withdrawal-002-1024x471.png)
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