Morningstar recently announced that the “safe” retirement withdrawal rate for 2026 is 3.9%

That number is based on updated capital market assumptions and a portfolio allocation of roughly 30–50% equities, with the remainder in bonds and cash

If someone retires in 2026, withdraws 3.9% of their portfolio, adjusts for inflation each year, and follows the model for 30 years…the research suggests they have a high probability of not running out of money

On the surface, that sounds reassuring.

But here’s what I see to be the problem:

A percentage is not a plan.

What Is a Safe Withdrawal Rate?

A safe withdrawal rate (SWR) is a projection-based estimate.

It attempts to answer this question: “What percentage of my investment portfolio can I withdraw each year and likely not run out of money over a specific time period?”

It is typically:

• Portfolio-driven
• Market-return dependent
• Based on historical modeling
• Assumed to last 30 years
• Calibrated to a targeted success rate (often 90%)

I believe it is a mathematical exercise. And math matters. But life is not a percentage.

What a Safe Withdrawal Rate Assumes

The 3.9% figure assumes:

• A 30-year retirement horizon
• A specific asset allocation range
• Inflation-adjusted withdrawals
• Stable spending discipline
• A defined probability target
• No deviation from the modeled structure

Extend retirement to 35 years and that rate drops to 3.5%

Factor in long-term care costs and it also drops to 3.5%

In other words: Change the assumptions…change the number.

That’s not necessarily wrong, I just feel it is incomplete.

Why This Approach Can Feel Unsettling to So Many People

Over the years, I’ve had clients come in and say: “We’ve done everything we were told to do…so why do we still feel unsure?”

Often, they’ve been given:

• A Monte Carlo probability
• A withdrawal percentage
• A portfolio allocation
• A projected rate of return

What they most likely haven’t been shown is:

• Where their income will come from month by month
• How taxes will impact cash flow over decades
• What happens if one spouse dies
• How Social Security timing affects survivor income
• How long-term care fits into the structure
• Whether their spending goals are realistic and sustainable

In my experience a percentage doesn’t answer those questions, a design does.

I Believe A Safe Withdrawal Rate Is a Projection. A Retirement Plan Is a Design.

A projection typically asks: “What might happen if markets behave within these assumptions?”

Whereas a design may ask: “How do we structure income, taxes, assets, and risk so your life works regardless of what markets do?”

Those are very different starting points.

In our firm, we do not begin with: “How much can you safely withdraw?”

We begin with:

• What do you want your life to look like?
• What do you want to spend?
• When?
• For how long?
• Do you want to leave a legacy?
• What if you live to 100?
• What if one of you passes away early?
• What if healthcare costs rise faster than expected?

Then we build a coordinated, comprehensive model around those answers.

• Income is strategically planned.
• Taxes are modeled.
• Timing is intentional.
• Risk is contained where possible.
• Living expenses are structured to avoid relying purely on market performance.

The portfolio supports the plan. However, the plan does not depend on the portfolio.

The Quiet Risk of Percentage-Based Planning

When retirement planning starts with a withdrawal percentage, it subtly may center everything around market performance.

I have seen when markets perform well, confidence rises. If markets decline, fear rises.

But retirement is not an investment strategy. It is a lifetime income strategy. And markets matter.

We believe they should not be the primary driver of whether someone feels secure.

Is 3.9% Wrong?

Not necessarily.

Research like this can be thoughtful and useful. It helps frame conversations about risk, longevity, and capital market expectations.

But it is a tool. Not a blueprint.

I feel the danger is not in the math, the danger is in mistaking a percentage for a personalized plan.

A Better Question to Ask

Instead of asking: “Is 3.9% safe?”

A more meaningful question might be: “Is my retirement designed around my life…or around a market assumption?”

I believe clarity doesn’t come from a probability. It comes from understanding how all the pieces of your financial life can fit together over time.

When someone can see:

• Their income sources
• Their expense structure
• Their tax strategy
• Their risk management plan
• Their long-term care strategy
• Their survivor plan

Anxiety typically softens. Not because the future is predictable. But because the structure is mostly intentional.

The Calm Translation

There will always be new headlines:

• “Safe withdrawal rate rises.”
• “Safe withdrawal rate falls.”
• “The 60/40 portfolio is dead.”
• “Markets entering a new regime.”

I refer to this as industry noise.

My role is to translate it, not amplify it.

The goal is not to chase the latest percentage. The goal is to design a retirement that works through decades of unknowns.

Because your life is not 3.9%.

And your plan shouldn’t be either.

Headlines will keep changing, but your plan shouldn’t have to.

If you’re ready for clarity about how your income, taxes, assets, and risks work together, let’s talk.