Glossary term

Safe withdrawal rate

The maximum % of a retirement corpus you can withdraw each year without running out — 4% in the US, 3–3.5% safer for India.

The Safe Withdrawal Rate (SWR) is the maximum percentage of a retirement corpus you can withdraw annually without depleting it over a 30-year retirement. The classic 4% figure comes from the Trinity Study on US market data.

For India with 6–7% inflation, the equivalent SWR is closer to 3–3.5%, which means you need 28–30× annual expenses as a corpus (vs the US 25×). The SWR isn't constant across all market conditions; sequence-of-returns risk in the early years of retirement can derail even a conservative withdrawal.