Key Takeaways Morningstar’s new analysis suggests a 3.9% starting withdrawal rate gives retirees a high probability of not running out of money during a 30-year retirement. Delaying Social Security until age 70 can meaningfully boost lifetime retirement income, but it may require temporary spending cuts or bridge strategies. You've done the work of saving for retirement, but now that you've reached your golden years, do you have a plan for how you'll spend down your nest egg? For future retirees, M ...

You may be able to get more income out of your savings each year.A lot of people work hard to build a retirement nest egg. But then, once their careers actually end, they wind up disappointed when they realize they're able to withdraw only a limited amount of money from their IRA or 401(k) each year.Financial experts tend to promote the 4% rule for managing a retirement nest egg. The rule states that if you withdraw 4% of your IRA or 401(k) account balance your first year of retirement and adjust future wit ...

Core Insights - Morningstar suggests a starting withdrawal rate of 3.9% for retirees, which has a 90% probability of success over a 30-year retirement horizon, assuming a portfolio of 30% to 50% stocks and the remainder in bonds and cash [2][3][6] Withdrawal Strategy - A retiree with $1 million would withdraw $39,000 in the first year, adjusting for a 2.46% inflation rate in subsequent years [3][4] - The withdrawal strategy should consider factors like taxes, investment fees, and Social Security timing, as these can significantly impact retirement income [4][5] Tax Implications - Withdrawals from Roth IRAs are tax-free, while traditional 401(k) withdrawals incur ordinary income tax on both investment earnings and contributions [7] - The choice of account type can affect the net amount available for spending during retirement [5][7] Social Security Considerations - Delaying Social Security benefits until age 70 can enhance lifetime retirement income, but may necessitate temporary spending cuts [6][8] - Integrating Social Security into the overall retirement strategy is crucial for maximizing total lifetime spending [8]