How Much Can I Spend in Retirement Without Running Out?

3.9%. Morningstar's research says you can withdraw that share of your savings in your first year of retirement, raise the amount with inflation every year after, and still have money left in 90% of simulated futures over 30 years. So if you're asking how much can I spend in retirement without running out, here's a fair place to start: about $39,000 a year for every $1 million you've saved.

Morningstar got that number by checking whether the money lasts, not by assuming an average return. (Source: Morningstar, The State of Retirement Income, December 2025.) It's a solid anchor, but it isn't your answer yet. Your age, your Social Security, your health care costs and how willing you are to adjust all move it up or down. Let's go through them one at a time.

The short answer: start near 3.9%, then adjust

Here's what a 3.9% starting withdrawal looks like at a few savings levels. It's simple math, before taxes. These figures are examples, not recommendations.

Three things to know about where 3.9% comes from:

• It's the highest starting rate with a 90% chance of lasting 30 years, assuming a portfolio of roughly 30–50% stocks (Boldin's summary of Morningstar's research).
• It isn't fixed. It went up from 3.7% the year before. Morningstar estimates it again every year (Kiplinger).
• More stock doesn't automatically let you spend more. By Morningstar's figures, the safe rate falls to 3.6% at 80% stocks and 3.7% at 10% stocks (Keil Financial Partners).

Also, keep in mind that the research covers 30 years. Retire at 62 and 30 years only gets you to 92.

Why rules of thumb disagree

Most of the rules you'll read about are quick to apply. They also give very different answers. Here's what each one says about the same $1 million.

Sources: Wealthtender and White Coat Investor on spending multiples; Boldin on Morningstar and William Bengen; AARP and Consumer Reports on the shortcuts.

The same savings balance gives you anywhere from about $30,000 to $47,000. Why so far apart? Bengen, who created the 4% rule, looks backward at the worst periods in market history. Morningstar looks forward and simulates what could happen next. They're answering different questions.

Most of these rules share the same blind spots, too. They assume a flat, inflation-adjusted, pre-tax withdrawal every year. They don't account for Social Security, taxes or health care. They also ignore sequence-of-returns risk, which is about the order your returns arrive in. A market drop in your first few years of withdrawals hurts more than the same drop ten years later, because you're selling investments while they're down.

What a "90% chance of success" actually means

The method behind that 90% is called Monte Carlo simulation. In plain terms, you run your plan through a large number of possible market paths, some good, some bad, some in between, and count how many stay funded to the end. If 900 out of 1,000 futures still have money left, your plan succeeds 90% of the time.

What about the other 10%? It doesn't mean a one-in-ten chance that you'll wake up broke one day. A "failed" future in a simulation assumes you kept spending the same inflation-adjusted amount no matter what happened. Real people don't do that. You'd see your balance shrinking years in advance, and you'd have time to cut back.

So the success rate isn't a pass/fail grade. It's a trade-off:

• Higher success rate: you spend less now, and you'll more likely leave money unspent.
• Lower success rate: you spend more now, and you'll more likely need to cut back later.

Neither one is wrong. The financial planning researchers at Kitces point out that people get anxious when their success rate drops and they can't see what spending change would fix it (Kitces). That's why it helps to tie the percentage to real dollars.

Guaranteed income lowers what your savings have to cover

Most ranking articles skip this part, and it matters a lot. Social Security and pensions don't come out of your portfolio. Your savings only have to cover what's left over.

Here's a hypothetical:

• You spend $6,000 a month.
• Social Security covers $2,500 of it.
• Your savings cover the other $3,500 a month, or $42,000 a year.
• At a 3.9% starting rate, that takes about $1.08 million.

If guaranteed income covered more of your spending, the amount you'd need saved would drop quickly. That's why the age you claim Social Security can change how much you can safely spend, even with the same savings balance.

Plan for a longer retirement than you expect

About one in three 65-year-olds may live to at least 90. (Source: Social Security Administration, Retirement Information for Medicare Beneficiaries, 2026.)

So a plan that stops at 85 is betting against a third of retirees. The 30-year window behind the 3.9% figure is reasonable for a 65-year-old. If you retire earlier, or your family tends to live long, the time horizon matters as much as the withdrawal rate. That's why the plan you build with Monte Climb's retirement calculator runs to age 95 by default, and you can extend it.

Health care is a real expense, not a rounding error

Fidelity estimated that one 65-year-old retiring in 2025 would spend $172,500 on Medicare premiums, deductibles and prescriptions over retirement, not counting long-term care. (Source: Fidelity Investments, 2025 Retiree Health Care Cost Estimate, July 2025.)

The 2026 estimate went up to $185,500, 7.5% more than the year before (NRMLA, reporting Fidelity's July 2026 estimate). Here's roughly where that money goes:

• About 45%: Medicare Part B and D premiums
• About 48%: other medical costs
• About 7%: prescriptions

If your "monthly spending" number leaves health care out, your safe-spending estimate will come out too high. Our engine charges Medicare premiums and income-based surcharges year by year instead of using one flat guess, because those costs grow over time.

How to spend more without taking on more risk

The 3.9% figure assumes you never adjust. Being willing to adjust is how you earn the right to spend more. Morningstar's research found that flexible withdrawal strategies beat the fixed 3.9% rate, and some came close to 6% (Morningstar).

The most practical flexible approach is guardrails: rules you set ahead of time for when to cut back and when to give yourself a raise. One example from Kitces:

1. Start at a spending level with a 95% success rate.
2. Cut spending if the success rate falls to 70% or below.
3. Raise spending if it climbs to 99% or above.

(Kitces)

This works because you make the decision before the bad year arrives, not in the middle of a market panic. Morningstar also notes that guardrails can ease retirees' worries, since you know in advance what you'll do. To use them, turn the percentages into dollars: "If my balance drops to this, I'll trim travel by that much."

Run your own numbers

Here's a sobering stat. 48% of workers have never estimated how much they'll need each month in retirement. (Source: EBRI/Greenwald, Retirement Confidence Survey 2025, Fact Sheet 3.) That half is guessing.

You don't have to guess. Your answer to "how much can I spend in retirement without running out" depends on your savings, your age and what you actually spend, and you can test those three numbers directly. The Monte Climb calculator runs them through 1,000 simulated futures and gives you a success rate. It runs in your browser, and nothing is saved until you choose to save it. If the answer raises more questions, like whether you're on track, whether you can retire at 62, or what a sustainable spending level looks like, you can ask William, our AI planner. He shows his work.

Your result will be a probability, not a promise. It's planning software, not advice. But it's built on your numbers, not someone else's rule of thumb.

Show my answer →

Frequently asked questions

How much can I spend per year with $1 million in retirement?

Using Morningstar's 3.9% safe starting withdrawal rate, that's about $39,000 in the first year, or $3,250 a month, adjusted for inflation after that. Morningstar found this level kept money in place in 90% of simulated futures over 30 years with a portfolio of roughly 30–50% stocks. Social Security, taxes and health care costs will change your own number.

Is the 4% rule still safe?

It's close, but it isn't the most cautious estimate. Morningstar's forward-looking research puts the safe starting rate at 3.9%. William Bengen, who created the 4% rule, now puts the historical worst-case safe rate at 4.7%. The two figures differ because one simulates possible futures and the other looks back at past markets.

What does a 90% success rate mean in retirement planning?

It means that in 900 out of 1,000 simulated market futures, your money lasted to the end of the plan. The other 10% assume you never cut spending, even as your balance shrank. In real life you'd usually see trouble coming years ahead and could adjust.

How long should my retirement plan last?

Longer than you might expect. The Social Security Administration says about one in three 65-year-olds may live to at least 90. That's why many planners, including Monte Climb, run plans to age 95 by default.

How much should I budget for health care in retirement?

Fidelity's 2025 estimate for one 65-year-old was $172,500 in Medicare premiums, deductibles and prescriptions over retirement, not counting long-term care. Its 2026 estimate went up to $185,500. Include health care in your monthly spending so your safe-spending number isn't too high.