Most people have un-smooth spending year to year in retirement. So it's not really possible to "follow" a withdrawal rate in my opinion. You may be more un-smooth than some, but this happens for most.Since my spending is not very smooth year to year, I figure trying to stick to a withdrawal rate doesn't make sense for my situation.
To me, withdrawal rate is best used as a planning tool, not as a budgeting tool. The common number used is 4% (same as 25 times your expenses). If your nest egg is at least 25 times larger than your expenses (including taxes and lumpy things like replacing a roof), then you theoretically have enough to retire. If your nest egg is less than that, you may have to work longer, save more or spend less in retirement. Or just get lucky.
Even though I don't see withdrawal rate as a budgeting tool, I do keep an eye on it. Several years of spending more than the 4% number would definitely catch my attention and I'd be looking for ways to cut back if needed.
Statistics: Posted by retiredjg — Sun Jan 11, 2026 9:33 am — Replies 7 — Views 604