What Withdrawal Rate Do You Think Is Sustainable For Early Retirees?

All respondents

All answers:

Letters A, B, C, D and E refer to the following answers in all of this page's graphs:

  • A) Under 3%
  • B) 3-4%
  • C) 4-5%
  • D) 5-6%
  • E) Over 6%
  • X is the number of 'N/A' or not applicable.

    Key Takeaways from Survey Results

    • 36% of all respondents believe a withdrawal rate under 3% is sustainable for early retirees.
    • 33% of all respondents think a withdrawal rate between 3-4% is sustainable for early retirees.
    • 17% of all respondents believe a withdrawal rate between 4-5% is sustainable for early retirees.
    • 9% of all respondents think a withdrawal rate between 5-6% is sustainable for early retirees.
    • 5% of all respondents believe a withdrawal rate over 6% is sustainable for early retirees.

    Insights from this part of the survey

    The survey results provide us with interesting insights into the respondents' opinions on sustainable withdrawal rates for early retirees. The majority of respondents expressed cautious views, with a significant portion (36%) believing a withdrawal rate under 3% is sustainable.

    This indicates a conservative approach towards financial planning for early retirement.

    While a sizeable proportion (33%) of respondents considered a slightly higher withdrawal rate between 3-4% to be sustainable, it's essential to note that a significant number still adhered to a more conservative viewpoint.

    Furthermore, 17% of respondents expressed a tolerance for a withdrawal rate between 4-5%, which could be interpreted as a slightly more optimistic perspective on sustainable withdrawal rates.

    However, it's crucial to exercise caution when considering a withdrawal rate between 5-6% as sustainable, as only 9% of respondents believed in this possibility. This suggests that the majority of respondents were skeptical about the viability of such a withdrawal rate for early retirees.

    Interestingly, a small percentage of respondents (5%) held an even more adventurous outlook, believing that a withdrawal rate exceeding 6% could be sustainable. While this perspective might be seen as relatively risk-tolerant, it's essential to remember that the majority of respondents leaned towards more conservative withdrawal rate thresholds.

    Age analysis

    Ages from 25 to 29:

    Key Takeaways from Survey Results

    • For the age group 25-29, 53% of respondents believe that a withdrawal rate under 3% is sustainable for early retirees.
    • In the age group 29-33, 42% of respondents favored a withdrawal rate between 3-4% as sustainable.
    • Among respondents aged 33-37, the majority (42%) chose a withdrawal rate of 3-4% as sustainable for early retirees.
    • In the age range 37-41, 45% of respondents considered a withdrawal rate of 3-4% to be viable for early retirement.
    • For participants aged 41-45, the highest percentage (45%) opted for a withdrawal rate under 3% as sustainable.

    Insights from this part of the survey

    Looking at the survey results, it becomes evident that there is a variance in the perceptions of sustainable withdrawal rates among different age groups. Younger respondents aged 25-29 and 29-33 had a higher tendency to believe that a withdrawal rate under 3% was sustainable.

    However, as the age groups progressed, the percentage of respondents favoring a 3-4% withdrawal rate increased.

    Interestingly, no respondents in the age group 33-37 considered a withdrawal rate over 6% as viable.

    This indicates that as individuals grow older, they tend to value a more conservative approach to withdrawal rates.

    Furthermore, it is worth noting that the percentage of respondents selecting the 'N/A' option remained consistently at 0% across all age groups. This suggests that the participants had a clear opinion regarding sustainable withdrawal rates, without any uncertainty or lack of knowledge.

    Explanation and Suggestions

    The varying perspectives on sustainable withdrawal rates among different age groups highlight the influence of life experiences and financial situations on these beliefs. Younger respondents may have a more cautious approach due to fewer years of work experience and potentially higher financial responsibilities such as student loans or starting a family.

    On the other hand, older participants might have accumulated more savings and therefore feel comfortable with a slightly higher withdrawal rate.

    Please consider that individual circumstances play a crucial role in determining a sustainable withdrawal rate. Factors such as retirement savings, other sources of income, and lifestyle preferences should be taken into account.

    While the survey provides valuable insights on collective opinions, it is essential for individuals to assess their unique financial situations and consult with professionals to determine an appropriate withdrawal rate for their early retirement plans.

    Comparison of Preferred Sustainable Withdrawal Rates Among Age Groups
    Age GroupUnder 3%3-4%4-5%5-6%Over 6%
    25-298 (53%)2 (13%)3 (20%)1 (7%)1 (7%)
    29-339 (35%)11 (42%)3 (12%)2 (8%)1 (4%)
    33-375 (26%)8 (42%)2 (11%)4 (21%)0 (0%)
    37-415 (25%)9 (45%)4 (20%)1 (5%)1 (5%)
    41-459 (45%)3 (15%)5 (25%)1 (5%)2 (10%)

    Male versus female

    Male respondents:

    Key Takeaways from Survey Results

    • For male respondents, the majority believe a withdrawal rate of under 3% (32%) or 3-4% (30%) is sustainable for early retirees.
    • Female respondents also predominantly choose a withdrawal rate of under 3% (42%) or 3-4% (37%) as sustainable for early retirees.
    • Both male and female respondents show a declining trend in choosing higher withdrawal rates as sustainable for early retirees.
    • Only a small percentage of male respondents (7%) and an even smaller percentage of female respondents (2%) think a withdrawal rate over 6% is sustainable for early retirees.
    • No respondents selected N/A as their response, indicating a high level of engagement with the survey question.

    Insights from this part of the survey

    Looking at the statistics, it is interesting to see that both male and female respondents have similar views on what withdrawal rates are considered sustainable for early retirees. The majority in both groups lean towards the lower end of the spectrum, with under 3% being the most popular choice.

    This indicates a cautious approach to retirement planning. Perhaps respondents are concerned about the longevity of their savings and want to ensure they have a steady income throughout their retired years.

    The declining trend in selecting higher withdrawal rates further supports this notion.

    It is noteworthy that only a small percentage of respondents believe a withdrawal rate over 6% is sustainable. This suggests that respondents understand the risks associated with withdrawing a larger portion of their savings and are more conservative in their estimates.

    The fact that no respondents selected N/A shows a high level of participation and engagement with the survey question. People seem to have strong opinions on what withdrawal rates they consider feasible, indicating a genuine interest in retirement planning and financial security.

    Explanation and suggestions

    Based on the survey results, it is evident that early retirees are aware of the importance of conservative withdrawal rates to ensure their financial stability in retirement. The preference for lower withdrawal rates indicates a desire for long-term financial security.

    While there is no one-size-fits-all answer to what withdrawal rate is suitable for everyone, it is beneficial to err on the side of caution and aim for a lower percentage. This helps to create a buffer for unforeseen expenses, market fluctuations, and potential longevity of retirement.

    It is better to have a surplus than to face financial strain in the later years of retirement.

    To achieve a sustainable withdrawal rate, early retirees should consider a comprehensive financial plan that includes budgeting, investment strategies, and regular reassessment of their retirement goals.

    Seeking advice from financial professionals or engaging with retirement communities can provide valuable insights and support in navigating the complexities of retirement planning.

    Female respondents:

    Good financial education' versus 'poor financial education'

    Good financial education:

    Key Takeaways from Survey Results

    • 43% of respondents with good financial education believe a withdrawal rate of under 3% is sustainable for early retirees.
    • 29% of respondents with good financial education think a withdrawal rate of 3-4% is sustainable.
    • 20% of respondents with good financial education believe a withdrawal rate of 4-5% is sustainable.
    • Both respondents with good and poor financial education consider a withdrawal rate over 6% as not sustainable for early retirees.

    Insights from this part of the survey

    Based on the survey results, it is evident that respondents with good financial education tend to have a more conservative view on the sustainable withdrawal rate for early retirees. The majority of them, accounting for 43%, advocate for a withdrawal rate of under 3%.

    Meanwhile, 29% of respondents with good financial education believe a rate of 3-4% is sustainable.

    On the other hand, respondents with poor financial education seem to have a slightly more optimistic outlook. Although 29% also consider a withdrawal rate of 3-4% as sustainable, a significant number, 37%, fall within this range.

    Only 14% of respondents with poor financial education believe a withdrawal rate of 4-5% is sustainable for early retirees.

    It is noteworthy that no respondents, regardless of their financial education, consider a withdrawal rate over 6% as sustainable. This indicates a general consensus among the participants that withdrawing more than 6% of retirement savings per year is not a viable strategy for sustaining a comfortable retirement lifestyle.

    Explanation and Suggestions

    These survey results highlight the importance of financial education when it comes to determining the sustainable withdrawal rate for early retirees. Respondents with good financial education, who have likely acquired knowledge about investment, savings, and long-term financial planning, tend to be more cautious in their approach.

    They understand the need to prioritize capital preservation and acknowledge the potential risks involved in relying heavily on investment returns to sustain retirement expenses.

    On the other hand, respondents with poor financial education may lack a comprehensive understanding of the intricacies of personal finance. Their tendency to suggest slightly higher withdrawal rates could stem from a lack of awareness about the potential drawbacks and long-term consequences of aggressive withdrawal strategies.

    Poor financial education:

    Prefers a minimalist lifestyle' versus 'prefers a consumist lifestyle'

    Prefers a minimalist lifestyle:

    Key Takeaways from Survey Results

    • Over half of respondents who prefer a minimalist lifestyle believe a withdrawal rate under 3% is sustainable for early retirees.
    • A significant portion (38%) of respondents who prefer a minimalist lifestyle believe a withdrawal rate between 3-4% is sustainable.
    • Only a small percentage (4%) of those who prefer a minimalist lifestyle think a withdrawal rate between 4-5% is sustainable.
    • A small percentage (8%) of respondents who prefer a minimalist lifestyle think a withdrawal rate between 5-6% is sustainable.
    • None of the respondents who prefer a minimalist lifestyle believe a withdrawal rate over 6% is sustainable.

    Insights from this part of the survey

    Based on the survey results, it is evident that a significant majority of those who prefer a minimalist lifestyle are cautious about withdrawal rates for early retirees. More than half of them believe that a withdrawal rate under 3% is sustainable.

    This suggests that they prioritize financial security and are willing to make sacrifices in order to maintain a stable financial future.

    Furthermore, the survey reveals that only a small percentage of respondents who prefer a minimalist lifestyle are comfortable with a withdrawal rate higher than 4%. This indicates that they may have a conservative approach to spending, opting for a more frugal lifestyle even after retirement.

    On the other hand, respondents who prefer a consumerist lifestyle exhibit a slightly different perspective. While a majority of them still believe in relatively conservative withdrawal rates, there is a larger percentage (11%) who are comfortable with withdrawal rates over 6%.

    This suggests that they may have a higher risk tolerance and are more inclined towards indulging in their desired lifestyle, even if it means potentially higher financial risks in the future.

    Explanation and suggestions

    The variations in response between those who prefer a minimalist lifestyle and those who prefer a consumerist lifestyle can be attributed to their respective values and priorities. Those who lean towards minimalism tend to prioritize financial security and long-term stability, while those with consumerist tendencies may prioritize immediate gratification and indulgence.

    For those who prefer a minimalist lifestyle, the survey results suggest a prudent approach to early retirement. With a majority advocating for withdrawal rates below 3%, it is evident that they value maintaining a conservative spending pattern to ensure a secure financial future.

    This aligns with the principles of minimalism, which emphasize reducing excess and embracing simplicity.

    On the other hand, those with a consumerist lifestyle might find it helpful to reassess their priorities and consider striking a balance between present enjoyment and future financial security. While it's understandable to desire a fulfilling lifestyle, it's essential to weigh the potential risks that come with higher withdrawal rates.

    Seeking guidance from financial advisors and developing a comprehensive financial plan can help individuals make informed decisions about their retirement.

    Withdrawal Rate Comparison
    Withdrawal RateMinimalist LifestyleConsumerist Lifestyle
    Under 3%51%19%
    3-4%38%28%
    4-5%4%32%
    5-6%8%11%
    Over 6%0%11%

    The provided table offers a clear comparison of withdrawal rates between respondents who prefer a minimalist lifestyle and those who prefer a consumerist lifestyle. It highlights the notable differences in their perspectives on sustainable withdrawal rates for early retirees.

    Prefers a consumist lifestyle:

    The complete survey and the other results

    You can find the complete survey results, methodology and limitations here:

    Early retirement survey

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