Planning for Retirement: Why Your Withdrawal Strategy Matters

By Jeffrey Corliss on August 19, 2025

Most people spend years saving and investing for retirement—but the planning shouldn’t stop once the paychecks do. Shifting from earning income to drawing from your portfolio is a big transition, and it comes with a new set of decisions and risks. This stage, known as the distribution phase, deserves just as much attention as the accumulation years.

One of the most important choices you’ll make is how much to withdraw each year. It might seem simple, but your withdrawal rate can have a major impact on how long your savings last. Without a thoughtful strategy, even a well-funded retirement account can run out sooner than expected.

Take a look at the chart below. It shows how different withdrawal rates—from 4% to 8%—affected a $500,000 portfolio for someone who retired in 2000 at age 65. Each line represents a different strategy, and you’ll notice how quickly they diverge, especially during market downturns. The takeaway? Higher withdrawal rates tend to deplete savings faster, while lower rates can help your portfolio last longer.

In this example, withdrawing 7% or 8% led to the portfolio running out before age 85. Meanwhile, the 4% and 5% strategies weathered market ups and downs more effectively. In fact, the 4% approach not only preserved the portfolio—it grew it over 20 years. That’s the power of compounding, even in retirement.

Of course, no strategy can eliminate market risk entirely. But starting with a more conservative withdrawal rate can give your investments time to recover from short-term losses and grow over time.

Retirement planning isn’t just about how much you’ve saved—it’s about how you manage those savings. There’s no one-size-fits-all solution, and your strategy doesn’t have to be set in stone. Fixed withdrawal rates can be a good starting point, but many retirees benefit from more flexible approaches. For example, you might adjust withdrawals based on market performance—taking less in down years and more when markets are strong.

Another popular method is the bucket strategy, which divides your assets into short-, intermediate-, and long-term segments. By keeping a few years’ worth of expenses in cash or short-term investments, you can avoid selling stocks during market dips—like those in 2008 or 2020—and give your long-term investments time to recover.

Everyone’s retirement journey is unique. Our goal is to help you build a withdrawal strategy that fits your personal goals and lifestyle—so you can enjoy retirement with confidence.