New Standards for Retirement Savings: How to Use the 4.7% Withdrawal Rule?

Traditional advice is to withdraw 4% from retirement accounts each year, but starting in 2026, experts have changed their tune—4.7% may be more realistic.

Digital Speaks

$1 million retirement fund → Withdraw 4.7% = $47,000 in the first year, then adjusted for inflation. For example, if your account appreciates by 10% in a year, you can withdraw a bit more next year; conversely, the withdrawal amount will decrease.

Why dare to rise by 0.7%?

1. The interest rate environment has changed—high-yield savings accounts can now give you 10 times the return without having to buy government bonds.
2. Work Subsidy —— Many retirees take on part-time jobs or side businesses, relieving the pressure on their account.
3. Dynamic Adjustment — Modern financial tools can track the market in real time and flexibly adjust withdrawal strategies.

Three ways to protect yourself

Emergency Fund → Start with 3-6 months of living expenses, ideally save for 2 years (20-30 years until retirement is too long)

Follow the market adjustments → If the account drops by 10%, withdraw less, and add it back when the market rebounds. Don't rigidly withdraw.

Don't eat full inflation → When there is a 3% inflation rate, only increase by 2%, so after a few years, a buffer zone is automatically accumulated.

Bottom line

4.7% is just a reference line; the key is to adjust flexibly according to your own situation—a flexible plan is what allows you to protect your principal while living comfortably.