If you are a retired Baby Boomer, or a Baby Boomer who has done any retirement planning at all, you are almost certainly familiar with the 4% rule. This rule helps you define a safe withdrawal rate. If you follow it, you can withdraw 4% of your retirement account balance in the first year of retirement. Each year thereafter, you can increase withdrawals based on inflation. The goal of following this rule is for your retirement money to last for at least 30 years.

This rule may no longer apply, though. In fact, the 4% rule for Baby Boomers has changed for 2026. Here’s what you need to know.

While the 4% rule makes it easy to decide how much to withdraw, it is also not a rule you can necessarily count on. In fact, experts from Morningstar have published an updated, revised recommendation this year.

Based on Morningstar’s recent retirement income research, Morningstar experts now recommend that you withdraw slightly less. Instead of a 4% withdrawal rate being the safe starting point for retirees, the new recommendation is that 3.9% is the safe withdrawal rate.  This would give you a 90% probability of having money left at the end of 30 years, and would provide a consistent level of inflation-adjusted spending during that time period.

Morningstar made this adjustment after considering assumptions about inflation and about future asset-class returns. It is an increase from the recommended safe withdrawal rate last year and in most years prior. Here were the previous recommendations:

  • 3.7% 2025

  • 4.0% in 2023

  • 3.8% in 2022

  • 3.3% in 2021.

New retirees can maintain these withdrawal rates if they have an equity rating of between 30% and 50%, according to Morningstar.

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Adjusting the 4.00% rule to the 3.9% rule isn’t going to make a huge change in any retiree’s finances. For each 100K in your investment account, if you withdrew 4% or $4,000, that’s not markedly different than if you withdrew 3.9% or $3,900. However, these adjustments show that following simple rules-of-thumb like the 4% rule may not actually be the best approach to retirement planning.

With so much fluctuation over time, the 4% rule may not provide the level of certainty most people would prefer. Unfortunately, one big issue is that it’s based on what happened in the past, not on what will happen in the future. Projected future returns can change, and life expectancies can (and have) gotten longer and could continue to get longer as new cures for conditions are found.

Morninstar also acknowledges that retirees who are willing to tolerate fluctuations in spending can start with a much higher withdrawal rate closer to 6% if they don’t assume they must take out the same amount of money each year and instead make adjustments over time based on actual market performance and health status.

When it comes to preparing for a secure retirement, following this generic rule just doesn’t seem like the way to go, especially with so much at stake. Instead, it’s a good idea to work with a financial advisor to make a personalized plan based on your assets, health status, marital status, and retirement goals.  If you don’t plan to do that, though, be aware that the 4% rule has changed for 2026, and be sure to adjust accordingly so you aren’t taking out more than you should.

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