Retirement planning rarely ends at the savings target; the harder question comes next: how much to pull out each year without outliving the portfolio.

Three of the most widely cited benchmarks for safe retirement withdrawals point to three different numbers, and the differences come down to assumptions about portfolio composition, market conditions, and how long the money needs to last. 

The gap between them can add up to thousands of dollars in annual income or years of missed spending.

Fidelity’s withdrawal guideline and what the 10% failure rate means

Fidelity’s retirement guidelines recommend taking no more than 4% to 5% of total savings in the first retirement year, with annual inflation adjustments after that. 

The firm models this rate for someone who retires at 67, invests more than 50% in stocks on average over their lifetime, and plans through age 93.

Fidelity describes these targets as part of a strong plan framework, stress-tested across a broad range of investment mixes and market outcomes, the firm noted. The simulations produced a success rate of nine out of ten. 

What the framing leaves unstated is the reverse: in one of every ten scenarios, the plan left the portfolio empty before the spending period ended.

Morningstar’s 2026 research sets a lower safe withdrawal floor

Morningstar’s annual State of Retirement Income report, published in December 2025, calculated a safe starting withdrawal rate of 3.9% using forward-looking return forecasts rather than purely historical market data.

Authors Amy C. Arnott, portfolio strategist at Morningstar, Christine Benz, director of personal finance and retirement planning at Morningstar, and Jason Kephart, senior principal of multi-asset ratings at Morningstar, built that figure around a balanced portfolio weighted between 30% and 50% equities.

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The model assumed a 30-year spending horizon and a 90% probability of retaining at least some funds at the end, according to Morningstar.

The 3.9% rate is up from the 3.7% the firm recommended for 2025, driven by modestly improved capital market assumptions. On a $1 million portfolio, the gap between 4% and 3.9% works out to $1,000 less in year-one income.

Morningstar’s 2026 research lowers the safe withdrawal rate to 3.9%, highlighting why retirees may need more conservative income strategies.

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Stock-heavy portfolios lower the safe rate, but flexible spending can raise it

One counterintuitive finding from the Morningstar research challenges a common assumption about equity exposure.

Portfolios with more than 50% in stocks did not support the highest safe withdrawal rates because volatility introduced greater sequence-of-return risk.

Sequence risk refers to the danger of withdrawing from a declining portfolio in the early years of retirement, which permanently locks in losses.

A retiree who faces a 30% drawdown in year one cannot recover the same way as one whose decline comes 15 years later.

Christine Benz, director of personal finance and retirement planning for Morningstar and author of How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement, said in a Q&A on the 2026 spending rate that retirees willing to adjust spending year to year can likely afford to withdraw more than the baseline rate.

Don’t just take that 3.9% and run with it. You probably can and should enlarge your spending if you are willing to be flexible,

Morningstar found that retirees willing to adjust dynamically in response to market conditions could safely start at rates as high as 5.7%.

The firm tested eight flexible approaches, including guardrails tied to portfolio performance and required minimum distribution formulas.

Bengen’s 4.7% revision rests on a portfolio most retirees do not hold

Retired financial adviser William Bengen introduced the original 4% withdrawal rule in 1994, built on a portfolio 50/50 split between large-cap U.S. stocks and intermediate-term Treasury bonds.

His research identified the worst-case historical withdrawal rate at 4.15%, which was rounded down to the number that became a cornerstone of retirement planning.

Bengen has since revised his safe withdrawal estimate upward to 4.7%, a figure he calls the historical worst-case rate for all retirees, in his August 2025 book A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More, CNBC reported.

The revision rests on a significantly more diversified portfolio than most Americans hold, including allocations to mid-cap, small-cap, micro-cap, and international equities.

Applying that 4.7% to a conventional 60/40 portfolio overstates the margin of safety. Bengen’s updated figure assumes a 55% equity allocation spread across those broader asset classes, Advisor Perspectives reported.

Whether your withdrawal rate reflects 2026 conditions or outdated backtesting

The spread between Fidelity’s upper range, Morningstar’s 3.9% baseline, and Bengen’s 4.7% reflects that each models a different portfolio, a different time horizon, and a different definition of failure.

“There’s significant risk there in terms of outliving your assets,” Mark Warshawsky, a senior fellow at the American Enterprise Institute and former deputy commissioner for retirement and disability policy at the Social Security Administration, said in a statement to CNBC. “For people with typical risk aversion, that’s too risky.”

Morningstar’s Kephart has argued that whether a rate is derived from historical returns or forward-looking capital-market assumptions most affects whether the number fits current conditions. 

Historical backtesting may not fully reflect today’s bond yields, equity valuations, and portfolio structures.

Fidelity’s range tolerates a 10% failure rate with heavy equity exposure. Morningstar’s 3.9% uses forward-looking estimates and moderate stock weighting. Bengen’s 4.7% requires diversification that most portfolios lack.

Defaulting to 4% without knowing which assumptions it rests on means relying on a number that may not fit the portfolio behind it.

Related: Retirees who follow the 4% rule may face a rude shock