The REAL Max Withdrawal Rate for a 40 Year Retirement

Описание: If you’re 50+ and you’ve saved $1 million+ for retirement, you’ve probably heard the “4% rule”… but what if the real question isn’t:
“How do I avoid running out of money?”
…but instead:
“How much can I safely spend?”
In this video, I run the opposite of last week’s retirement backtest.
Instead of trying to die with the biggest portfolio balance, I test a “maximum spending” retirement plan to answer:
✅ What was the safe maximum withdrawal rate over the last 40 years?
✅ How much could a retiree have spent if they retired into a long bull run?
✅ What should you do if your portfolio grows faster than expected?
What we tested (1986–2025 backtest)
To stress-test real retirement spending, I ran inflation-adjusted withdrawals at:
• 5%
• 6%
• 7%
• 8%
• (and then solved for the “safe max”)
Using two diversified portfolios:
📈 85/15 (aggressive: 85% stocks / 15% bonds)
⚖️ 60/40 (traditional balanced portfolio)
This helps illustrate how risk, volatility, and sequence-of-returns can impact your ability to spend confidently, especially if you’re targeting a 30–40 year retirement.
The big takeaway
Over this specific 40-year period, the safe max withdrawal rate on the 85/15 portfolio came out to roughly 8.5%+ (inflation-adjusted), if your goal is to spend the most and end near zero.
That doesn’t mean 8.5% is always safe (timing matters a LOT)… but it does show why blindly following the 4% rule can cause retirees to underspend and leave behind far more than they intended.

If you retire into a bull market
If your portfolio takes off early in retirement (think long bull run), here are five ways to pivot:
1. Give yourself raises beyond inflation (using guardrails / prosperity rule)
2. Improve tax efficiency (Roth conversions, legacy tax planning)
3. Consider reducing portfolio risk after “winning the game”
4. Increase charitable giving (including QCDs after age 70½)
5. Have 'the talk' with your beneficiaries

I hope you find this video helpful!

Are you interested in learning more about working with me on your retirement plan? You can start with visiting my firm's website at https://imaginefinancialsecurity.com/

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I look forward to hearing from you and seeing how we can help fire your boss, maximize retirement impact, minimize your lifetime tax bill, and worry less about money. -Kevin

This is for general education purposes only and should not be considered as tax, legal or investment advice