How Morningstar Calculates 3.9%

If you’re newly retired or will join the ranks soon, it’s time to think about how you plan to spend your nest egg. Morningstar researchers are helping new retirees figure out where to begin. The recently published State of Retirement Income report concluded that the starting safe withdrawal rate for people beginning their retirement in 2026 is 3.9%. That number might appear low. However, the team has analyzed several strategies to lift it to almost 6%. Morningstar portfolio strategist Amy Arnott has investigated the data and joined the podcast to explain flexible withdrawal strategies.

How Much Can You Spend in Retirement? Here’s Your Starting Safe Withdrawal Rate for 2026  https://apple.news/ALEEtAf1FTAm7WUFGvYvXVQ

On this episode:

00:00:00 Welcome

00:01:26 Understanding the 3.9% Safe Withdrawal Rate

00:02:33 How Flexible Strategies Lift Withdrawal Rates Up to 5.7%

00:03:48 Flexible Approaches for Retirees Seeking Predictable Paycheck-like Income

00:05:40 Inside the Vanguard Dynamic Spending Method

00:07:15 Highest Lifetime Spending & Highest Starting Safe Withdrawal Rate

00:09:20 Leaving a Legacy and Strengthening Your Portfolio

00:14:30 4 Financial To-Dos to Kick Off the New Year

Watch more from Morningstar:

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All in on Magnificent 7? Where You Should Invest Next

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