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Vanguard reports that one in four retirees don’t touch their retirement savings at all during the first five years after leaving work.
Recent research shows that married retirees withdraw about 2.1% of their savings annually, while spending 80% of their guaranteed income, like Social Security.
Morningstar’s latest analysis suggests retirees can safely withdraw 3.9% to start, close to the classic 4% annual withdrawal rule
Those willing to adjust spending based on market conditions could take out up to almost 6%.
The 4% rule is one of the best-known in personal finance: it’s the percentage of your retirement savings you should withdraw in your first year. Every year afterward, you adjust the percentage for inflation, and, if you have enough saved, your money should last for your retirement. But recent research shows many retirees aren’t even close to this traditional guideline.
A 2025 study in Financial Planning Review by David Blanchett and Michael Finke found that married 65-year-olds with at least $100,000 in assets withdraw just 2.1% per year from their retirement accounts. Single retirees take out even less, about 1.9%. Meanwhile, retirees spend about 80% of their guaranteed income, like Social Security, but only ever expend about half of their retirement savings.
The result is that while most people fear they won’t have enough to retire on, many retirees are living more frugally than they might need to, potentially missing out on experiences they spent a lifetime saving for. But for others, a lower withdrawal rate isn’t unfounded—it’s prudent based on the math of trying to float a retirement with less.
We take you through what you need to know below.
Reviewing the accounts of 70,000 retirees age 60 and over, Vanguard’s findings reveal just how cautious—and inconsistent—many retirees are in taking withdrawals:
Only about a third withdrew money during each of the years Vanguard reviewed, and just 20% of that group maintained a steady withdrawal rate considered to be between 3% and 10% annually.
The median retiree in Vanguard’s sample had a 401(k) balance of $133,000 at retirement, about 2.2 years’ worth of income. It’s no surprise that those who cashed out entirely tended to have smaller balances and lower income before they retired.
That $133,000 median balance is a critical detail. At the traditional 4% withdrawal rate, that provides about $5,300 a year—helpful for paying bills, but not nearly enough to fund a retirement. For retirees with more modest retirement savings, cautious spending isn’t a psychological quirk but a prudent approach to having fewer resources.
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