Safe Withdrawal Rate for a 40-Year Retirement: Is 4% Too High?

3.3%. That's the starting withdrawal rate Morningstar's early-retirement analysis finds still holds up in 90% of simulated futures over 40 years, for a portfolio of 40% stocks and 60% bonds. It's well below the 4% most people have heard of. If you're looking for the safe withdrawal rate for a 40-year retirement, start there. Most credible research lands between about 2.8% and 3.5%. So yes, for most portfolios, 4% is too high.

That range matters more than it sounds. On a $1 million portfolio, 4% is $40,000 a year and 3% is $30,000. That's a $10,000 gap every year, for four decades.

This guide covers what the research says, why the numbers disagree, and what the headline figures leave out.

The short answer: 4% was built for 30 years, not 40

The 4% rule comes from studies of 30-year retirements. Even over that horizon, current estimates come in a bit lower. Morningstar's 2025 research puts the safe starting rate at 3.9% for 30 years. "Safe" here means the money was still there in 90% of simulated outcomes, not that it was guaranteed. (Source: Morningstar, The State of Retirement Income 2025, Dec 2025.)

Add ten years and the number drops again. A longer retirement leaves more time for a bad stretch of markets to hurt you, and more years of spending to fund.

The Poor Swiss's update of the classic Trinity Study shows the same thing. Over 40 years, a 4% withdrawal falls below a 90% success rate unless the portfolio is 100% stocks (The Poor Swiss, Updated Trinity Study).

A common rule of thumb is to take about half a percentage point off the 4% rule for retirements of 40 years or more (Money Guy, Money Crashers). That gets you to roughly 3.5%, the top of the research range.

Safe withdrawal rate for a 40-year retirement: what the research says

Here are the main estimates side by side. They don't agree, and that's useful. The differences show which assumptions move the number.

Same question, five answers, all between 2.8% and 3.5%. Pfau's 3% is worth noting: it left the portfolio intact in every 40-year period since 1926 for both 50/50 and 75/25 mixes. Even the worst periods in history didn't break it.

The estimates keep falling as retirements get longer:

• 35 years: 3.5% (Morningstar)
• 40 years: 3.3% (Morningstar)
• 50 years: 2.9% (Morningstar), or about 2.4% before taxes (PWL Capital)
• 60 years: just above 2% at a 10% failure probability (Retirement Income Journal)

One caveat: Morningstar updates its figures every year. Check the current version of any published rate before you rely on it.

Why the numbers disagree

There's no single "correct" safe rate. Four assumptions do most of the work.

1. History or forecast?

Historical backtests ask what would have survived every real stretch of past markets. Forward-looking simulations, like Morningstar's, start from expected future returns, and those can be lower than the long-run historical average. Different starting points give different answers.

2. How sure do you want to be?

A 90% success target allows one failure in ten. A 100% target, like Pfau's "every period since 1926," allows none. The stricter you are, the lower the rate.

3. How much is in stocks?

Over 40 years, stocks matter. The Poor Swiss data shows 4% only clears 90% success over 40 years with a 100% stock portfolio. Stocks also bring bigger drops along the way. Early Retirement Now's research, summarized by CXO Advisory, found that for a 60-year horizon, portfolios with 75% or more in stocks had strong odds of success at withdrawal rates of 3.5% or less. The same summary also puts the maximum safe rate for an all-stock portfolio at 3.25%.

4. Taxes and fees

Many headline numbers ignore both. PWL Capital found that taxes on a $1 million portfolio cut the 40-year rate from about 2.9% to 2.8%. Fees cost more: a 1% annual fee lowered safe rates by about half a percentage point on average (PWL Capital). Over 40 years, a 1% fee can take away a big part of what you could otherwise spend.

What "failure" actually means

Most articles stop at a success rate. "90% of futures stay funded." But what happens in the other 10%?

Failures aren't all the same. Running out of money in year 39 of a 40-year plan is very different from running out in year 22. A success rate alone doesn't tell you which one you're facing.

When you look at your own results, ask two more questions:

• When does the money run out in the futures that fail?
• How much would spending have to drop to avoid that?

A Monte Carlo simulation can answer both. Monte Carlo means running your plan through many randomly generated market paths, some good, some bad, some ugly, and counting how many stay funded. The plan you build at Monte Climb's retirement calculator runs 1,000 of those futures and gives you the share that last. It's a probability, not a promise.

The income that shows up later

Here's what most safe-withdrawal tables leave out. They assume your portfolio pays for everything, every year, for all 40 years.

For most people it won't. If you retire early, Social Security or a pension might start 15 to 25 years in. Once that money arrives, you need less from your portfolio. Early withdrawals can be higher, and later ones much lower.

So a rate taken straight from a table can be too cautious for someone with guaranteed income coming later. It can also be too generous for someone without it. The table can't tell which group you're in. Your own numbers can.

Longevity: is your "40 years" really 40?

A 40-year horizon sounds long. It may not be.

Social Security's own planning guidance says about one in three 65-year-olds may live to at least 90 (Source: Social Security Administration, Retirement Information for Medicare Beneficiaries, 2026). If you retire at 55, a plan that ends at 95 is exactly 40 years. If you retire at 50, it's 45.

A plan that stops too early is a quiet bet that you won't live long. That's why the plan you build here runs to age 95 by default, and you can extend it further.

Don't forget the gap years

Early retirement adds costs the headline rates ignore.

Health care before Medicare. If you stop working well before Medicare starts, you'll pay for private coverage in those years. After Medicare starts, the costs continue. Fidelity estimates a 65-year-old retiring in 2025 will spend $172,500 on Medicare premiums, deductibles and prescriptions over retirement, and that figure doesn't include long-term care (Source: Fidelity Investments, 2025 Retiree Health Care Cost Estimate, Jul 2025). Our engine charges Medicare premiums and income-based surcharges year by year rather than using a flat guess.

Access to retirement accounts. Many retirement accounts restrict withdrawals before a certain age. Early retirees often plan a "bridge," using taxable savings or other strategies to cover the years before those accounts open up. It's a cash-flow question as much as a withdrawal-rate question.

Neither shows up in a single percentage. Both affect whether your money lasts.

Flexibility changes the answer

Every rate in this article assumes fixed spending: you take the same inflation-adjusted amount every year, whatever markets do.

Few real retirees spend that way. Many cut back in bad years and spend more in good ones. Withdrawal rules built on that idea, such as spending "guardrails" or rules tied to how expensive the market is (Early Retirement Now has written at length on CAPE-based dynamic withdrawals), generally support a higher starting rate. The cost is that your income will vary.

That's the trade-off. A fixed 3.3% means you hold spending steady through anything. A higher start means accepting that some years will be leaner. Neither is wrong. You need to know which one you're choosing.

How to test your own 40-year plan

The research gives you a range. Your plan needs one number. Here's how to get from one to the other:

1. Start in the 2.8%–3.5% range as a reality check for a 40-year horizon.
2. Check what you're assuming. What's your stock mix? What success rate are you aiming for? What are you paying in fees?
3. Include later income. Social Security or a pension changes what your portfolio has to cover.
4. Plan long enough. Set your horizon to your realistic lifespan, not the date you'd like to be done planning.
5. Stress-test it. Break your plan on purpose, before life does.

Then run your actual numbers. Three of them: your age, your savings, and what you spend each month. We'll run them through 1,000 simulated futures and show you how many stay funded. Want to go deeper? Ask William, our AI planner, follow-ups like "Am I on track?" or "What's a sustainable spend?" He shows his work.

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Frequently asked questions

What is the safe withdrawal rate for a 40-year retirement?

Most research puts it between about 2.8% and 3.5%. Morningstar's early-retirement analysis finds 3.3% for a 40/60 portfolio at a 90% success target. PWL Capital's Monte Carlo study finds about 2.9% before taxes for a 50/50 portfolio.

Is the 4% rule safe for a 40-year retirement?

Usually not. The Poor Swiss's updated Trinity Study found that over 40 years, a 4% withdrawal falls below 90% success unless the portfolio is 100% stocks. A common rule of thumb is to take about half a percentage point off for retirements of 40 years or more.

What withdrawal rate has never failed over 40 years?

Research by Wade Pfau, cited by Money Crashers, found that a 3% withdrawal rate left the portfolio intact in every 40-year period since 1926, for both 50/50 and 75/25 stock/bond portfolios.

How do fees affect the safe withdrawal rate?

A lot. PWL Capital found that a 1% annual fee lowered safe withdrawal rates by about half a percentage point on average. Over 40 years, that can take away a big part of what you could otherwise spend.

Does Social Security change my safe withdrawal rate?

It can. Most withdrawal-rate tables assume the portfolio pays for everything. If Social Security or a pension starts partway through retirement, your portfolio has less to cover later. That can support higher withdrawals in the early years. Running your own numbers is the best way to see how much.