Can We Afford to Withdraw $90k a Year in Retirement With $1.4M Saved in Our Early 60s?

Core Insights - Determining a safe and sustainable withdrawal rate is crucial for retirees to ensure their savings last throughout their lifetime [1][3][4] - A financial advisor can provide personalized strategies to balance income needs with longevity [2] Withdrawal Rates - The widely accepted 4% rule suggests retirees can withdraw 4% of a conservatively allocated portfolio annually, adjusting for inflation, with minimal risk of depletion over 30 years [3] - Withdrawing more than 4% significantly increases the risk of depleting retirement savings, especially early in retirement due to sequence of returns risk [4][5] Case Study - A couple in their early 60s withdrawing $90,000 annually from $1.4 million in retirement savings represents a 6.4% withdrawal rate, which is considered excessively risky [5] - A 2023 Morningstar analysis indicates that a 6.2% withdrawal rate has only a 50% chance of sustaining an all-stock portfolio for 30 years, while a 4% withdrawal rate with a conservative asset allocation increases sustainability odds to 90% [6] Compounding and Sustainability - Lower initial withdrawal rates can enhance the longevity of savings by leveraging the power of compounding [7] - Even slightly above 4% withdrawal rates can lead to sustainability issues over decades when accounting for taxes and market performance [7]