A withdrawal rate is a planning assumption for how much of a portfolio may fund annual spending. Small changes to the rate materially change the required capital.
OUR METHODSources → assumptions → European context → verdict
The mathematics
At 4%, annual spending is multiplied by 25. At 3.5%, it is divided by 0.035—about 28.6 times spending.
- €30,000 annually at 4%: €750,000
- €30,000 annually at 3.5%: about €857,000
Why consider a lower rate
Long retirements, sequence-of-returns risk, fees, tax and uncertain future spending may justify more margin.
Avoid false certainty
Neither rate guarantees success. Flexible spending, diversified assets, cash reserves and optional income can be as important as the initial percentage.
Educational illustration only—not personal financial, tax or investment advice. Tax, salary, broker and market figures change; verify current local information before acting.