What’s a Safe Withdrawal Rate in 2026? Morningstar Weighs In

If you’re trying to figure out how much you can safely spend in retirement, you’re not alone. It’s one of the hardest problems in financial planning. Each year, Morningstar publishes its State of Retirement Income report to help people answer a deceptively simple question:

How much can you spend without running out of money? It’s the question behind every safe withdrawal rate calculation, and one that Morningstar’s annual research tackles head-on.

The report’s 2026 findings reinforce something we believe deeply at Boldin: Retirement isn’t about a single “rule.” It’s about building a flexible, personalized plan.

Here are seven of the most important takeaways and what they mean for your future.

1. The “4% Rule” Is No Longer a Safe Default

For decades, retirees were told they could withdraw 4% of their portfolio each year. William Bengen, who originated the 4% rule, has since revised his findings. In his book A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More, he writes that 4.7% is the true worst-case safe maximum for retirees today.

But Morningstar’s latest research suggests a more conservative starting point, 3.9%, depending on conditions.

Why the shift? 

• Lower expected returns
• Higher market valuations
• Ongoing inflation uncertainty

Boldin’s take: What matters is you, not a rule of thumb 

Rules of thumb are helpful starting points, but dangerous endpoints. Your safe withdrawal rate depends on your plan, not an average. Your retirement income goals and needs are highly dependent on a wide variety of factors. 

Use the Boldin Planner to truly understand what you can safely spend. 

2. Market Conditions Shape Your Safe Withdrawal Rate

The 3.9% starting point represents a conservative baseline, but Morningstar’s research shows that retirees using flexible strategies, like adjusting spending with market conditions, may be able to withdraw as much as 5.7%.

Morningstar emphasizes that a better way to plan retirement income is to allow your safe withdrawal to change with the market, instead of being static. The approach is: 

• When stocks are expensive, you lower withdrawal rates
• When bond yields are low, you lower withdrawal rates
• When conditions improve, spending flexibility increases

Boldin’s take: Planning is indispensable 

We agree with this approach, and with the sentiment often attributed to Dwight D. Eisenhower: “Plans are useless, but planning is indispensable.” 

A static financial plan for the next 30 years of your life is inevitably going to fail. You need a plan that evolves as your life and the market change. That’s why maintaining a living plan with a tool like the Boldin Planner is so powerful.

3. Flexibility Is the New Superpower

One of the biggest insights from the report: Retirees who adjust spending over time can safely withdraw more. Flexible strategies like “guardrails,” or adjusting spending after market declines, increase both starting and lifetime income.

But there’s a tradeoff: More flexibility = more variability in income.

Boldin’s take: Yep, flexibility and adaptability are planning superpowers 

The goal isn’t rigid certainty, it’s confident adaptability. That’s where Boldin’s Guardrails tools come in: they help you set clear spending boundaries and dynamically adjust when markets or life circumstances change, so you can spend with confidence without putting your future at risk.

Just as important, your plan should reflect how your spending will actually evolve over time. Mapping out different phases of retirement — higher-spending years with travel or supporting children, followed by more moderate or healthcare-focused years, can dramatically improve the accuracy of your projections. 

The more clearly you can envision what you’ll need and want at each stage, the more precise and empowering your plan becomes.

4. Guaranteed Income Changes the Equation

Retirement income is rarely funded entirely by portfolio withdrawals. In reality, it typically falls into two distinct categories:

Guaranteed lifetime income: These are reliable monthly payments you’ll receive for the rest of your life, regardless of market conditions. Sources include Social Security, pensions, and certain annuities. This income forms the foundation of your financial security, you can count on it being there as long as you live.

Flexible income: Flexible income comes from sources that can vary over time, primarily withdrawals from your investment portfolio, but also part-time work, rental income, or other discretionary cash flows. Unlike guaranteed income, these sources require active decision-making and adjustment based on markets, taxes, and your evolving needs.

To truly understand your retirement income potential, you need a holistic plan that integrates both types of income. Your portfolio doesn’t need to cover all of your spending, only the gap between your expenses and your guaranteed income.

That shift changes everything.

• Your portfolio doesn’t have to do all the work
• You may be able to safely spend more from investments
• Or take on more growth-oriented investments when appropriate

Boldin’s take: It’s all in the details  

Your “safe withdrawal rate” is meaningless without context. What matters is how much of your essential spending is already covered by guaranteed income, and how much you actually need to withdraw, when, and under what conditions. The more clearly you define that gap, the more confident and flexible your retirement plan becomes.

The Boldin Planner is built for this exact task. 

5. Asset Allocation Still Matters, But Not How You Think

Most people believe that your allocation to stocks needs to be minimized or eliminated when you enter retirement. But this isn’t going to be true for the majority of retirees. 

Morningstar found that:

• Portfolios with moderate equity allocations (roughly 30%–50% stocks) often support stronger withdrawal rates.
• Too conservative → you run out of growth
• Too aggressive → volatility risk increases

Boldin’s take: Your allocations depends on you and your goals  

Here we differ slightly from Morningstar’s assessment. At Boldin, we believe that your ideal allocations will depend entirely on the details of your retirement plan. 

This isn’t about picking a “perfect” allocation. It’s about aligning your portfolio with your:

• Spending needs
• Income resources
• Projected spending forecasts and what is fixed and required vs. flexible and nice to spend spending
• Estate goals 
• Tolerance for change

6. Taxes, Timing, and Strategy Can Increase Income

The report highlights several overlooked levers:

Boldin’s take: You have more levers than you probably realize 

Your withdrawal rate isn’t just about investments, it’s about strategy. And, small decisions can create years of additional financial security.

Everyone has many different levers that can potentially be more valuable to your retirement security than your savings withdrawals. Minimizing taxes, optimizing investments, and utilizing home equity are just a few of the powerful ways people can maximize and optimize retirement income opportunities.  

7. The Biggest Risk Isn’t Overspending — It’s Getting It Wrong

Morningstar’s modeling shows a wide range of outcomes:

• In worst-case scenarios, sustainable spending could be as low as ~2%
• In better scenarios, it can be meaningfully higher

That’s a massive gap.

Boldin’s take: The numbers are important, but only because of the life they enable 

The real risk isn’t spending too much or too little, it’s not knowing, and missing opportunities for your life because of that uncertainty.

When you build a holistic retirement plan, one that accounts for your income sources, spending over time, taxes, and different market scenarios, you replace guesswork with insight. You can see not just if you’re okay, but what’s possible.

We hear from people every day who retire earlier than they thought possible, spend more confidently, or make meaningful life changes, all because they took the time to understand their full financial picture.

Clarity about your retirement income needs doesn’t just reduce risk. It expands your life.

What This Means for You

If there’s one takeaway from Morningstar’s research, it’s this: There is no universal “safe” number. Retirement income depends on:

• Your savings
• Your spending
• Your flexibility
• Your timing
• Your goals

And most importantly… Your ability to see how it all fits together.

The Boldin Bottom Line

Paying yourself in retirement isn’t about guessing a percentage. It’s about designing a plan that:

• Adapts to changing markets
• Balances spending and security
• Reflects what actually matters in your life

That’s where real financial confidence comes from. With the Boldin Planner, you can model your withdrawal strategy, test different scenarios, and see exactly how your decisions impact your future, so you don’t have to rely on rules of thumb.

Because the goal isn’t to follow a rule. It’s to build a plan you can trust will evolve with you.

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