For many investors, retirement withdrawal strategies have traditionally included the 4% rule as the ideal withdrawal rate. However, Morningstar researchers now recommend a safe withdrawal update, suggesting a starting safe withdrawal rate of 3.7% for 2025. 

This adjustment reflects the effects of higher equity valuations and lower fixed-income yields, which have reduced return expectations for stocks, bonds, and cash over the next 30 years. 

In the latest edition of our State of Retirement Income report, we’ve modeled the safe retirement drawdown rate for 2025.  It also evaluates retirement withdrawal strategies designed to minimize taxes, optimize Social Security benefits, and extend an investor’s retirement income. These strategies focus on helping clients withdraw from their savings efficiently, meet living expenses, and preserve their retirement account for future needs. 

With these data-driven insights, financial advisors can develop tailored approaches that address tax rates, protect retirement income, and promote greater financial confidence and security in retirement.