The Updated Trinity Study: Safe Withdrawal Rates in 2026
The 4% rule is the most widely cited number in retirement planning. It comes from the 1998 Trinity Study, which tested historical withdrawal rates against U.S. stock and bond returns going back to 1926. For decades, it was good enough.
But the world has changed. Bond yields collapsed and partially recovered. Equity valuations are historically stretched. Inflation spiked and remains uncertain. The question isn't whether the 4% rule was right for the 20th century — it's whether it still holds for retirees withdrawing their first dollar in 2026.
We ran 1,000 Monte Carlo simulations using J.P. Morgan's 2026 Long-Term Capital Market Assumptions to find out. The results are sobering.
The Bottom Line: 4% Is Too Aggressive
At 95% confidence over a 30-year retirement, the safe withdrawal rate for a balanced 60/30/10 portfolio is 2.5% — not 4%. Even a conservative bond-heavy portfolio only supports 3.0% at the same confidence level.
The 4% rule gives a balanced portfolio just a 68.3% survival rate over 30 years. That means roughly 1 in 3 retirees would run out of money.
Run Your Own Numbers
Enter your portfolio allocation, pick a retirement horizon and confidence level, and get your safe withdrawal rate with a full survival heatmap — in seconds.
Open SWR CalculatorWhat We Tested
We tested three portfolio profiles across 13 withdrawal rates (2% to 8%) and 6 time horizons (15 to 40 years):
| Profile | Stocks | Bonds | Cash |
|---|---|---|---|
| Conservative | 30% | 60% | 10% |
| Balanced | 60% | 30% | 10% |
| Aggressive | 80% | 15% | 5% |
Simulation Parameters
Each simulation path models a retiree withdrawing a fixed percentage of their starting portfolio, adjusted annually for inflation, with annual rebalancing and a 0.5% management fee:
- Simulations: 1,000 paths per withdrawal rate/horizon combination
- Return model: Lognormal with Cornish-Fisher skew/kurtosis adjustment
- Inflation: Stochastic CPI-linked (30% correlated to portfolio returns)
- Rebalancing: Annual
- Fees: 0.5% annual management fee
- Assumptions: J.P. Morgan 2026 Long-Term Capital Market Assumptions
This is critical: we are not using historical U.S. returns. We are using J.P. Morgan's forward-looking estimates for the next 10–15 years — which reflect current valuations, yields, and macroeconomic conditions.
A Quick Recap: The Original Trinity Study
In 1998, three professors at Trinity University (Cooley, Hubbard, and Walz) published “Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable.” They tested withdrawal rates from 3% to 12% against rolling periods of U.S. stock and bond returns from 1926 to 1995.
The headline finding: a 50/50 stock/bond portfolio with a 4% initial withdrawal rate (adjusted for inflation) survived 95% of historical 30-year periods. The “4% rule” was born.
The study was later updated by Wade Pfau and others, and the most rigorous modern treatment is Karsten Jeske's (Big ERN) Safe Withdrawal Rate Series, which runs to 60+ parts and incorporates CAPE-based dynamic strategies, glidepaths, and real-world complications like Social Security timing and variable spending.
ERN's work consistently shows that 4% is borderline even with historical data, especially for early retirees with 40–60 year horizons. His preferred SWR for a 60-year retirement is closer to 3.25–3.5%.
Why Forward-Looking Assumptions Matter
Historical backtesting has a fundamental problem: survivorship bias. The U.S. equity market from 1926 to today is arguably the most successful capital market in human history. Extrapolating from it assumes the future will be equally kind.
J.P. Morgan's capital market assumptions account for where we are today:
- Equity valuations are elevated. The Shiller CAPE ratio for the S&P 500 sits above 35, well above its long-term average of 17. Higher starting valuations have historically predicted lower future returns.
- Bond yields have partially recovered. After the 2020–2023 rate shock, yields are higher than a few years ago but still below long-term historical averages in real terms.
- Inflation is uncertain. The post-COVID inflation spike introduced regime uncertainty that historical models don't capture well.
J.P. Morgan projects global equities (ACWI) at 7.1% nominal and U.S. aggregate bonds at 4.6%. Both are materially lower than the historical averages the Trinity Study relied on. Lower expected returns mean the same withdrawal rate depletes the portfolio faster.
The Results: Survival Heatmaps
Each cell shows the percentage of 1,000 simulated retirements that didn't run out of money. Green means safe (>95% survival), yellow is marginal (80–95%), orange is risky (60–80%), and red means you're likely to run out of money.
Conservative Portfolio (30/60/10)
The bond-heavy portfolio performs best at lower withdrawal rates thanks to lower volatility, but it runs out of growth runway over longer horizons.
Survival probability (%) — Conservative 30/60/10
| WR | 15y | 20y | 25y | 30y | 35y | 40y |
|---|---|---|---|---|---|---|
| 2.0% | 100.0% | 100.0% | 100.0% | 99.9% | 99.8% | 99.3% |
| 2.5% | 100.0% | 100.0% | 100.0% | 99.7% | 98.5% | 95.2% |
| 3.0% | 100.0% | 100.0% | 99.8% | 98.0% | 91.9% | 81.6% |
| 3.5% | 100.0% | 99.8% | 98.1% | 90.3% | 73.7% | 55.8% |
| 4.0% | 100.0% | 99.5% | 91.8% | 70.6% | 47.2% | 28.8% |
| 4.5% | 100.0% | 97.6% | 75.6% | 45.4% | 22.2% | 12.2% |
| 5.0% | 99.8% | 89.4% | 52.8% | 21.7% | 9.0% | 3.6% |
| 5.5% | 99.4% | 73.4% | 28.3% | 8.8% | 2.6% | 0.7% |
| 6.0% | 96.8% | 52.2% | 13.1% | 2.6% | 0.6% | 0.1% |
The 4% withdrawal rate has a 70.6% survival rate at 30 years and drops to just 28.8% at 40 years. For a 30-year retirement at 95% confidence, the SWR is 3.0%.
Balanced Portfolio (60/30/10)
The classic “60/40-ish” allocation. This is the closest analog to the Trinity Study's original test portfolio.
Survival probability (%) — Balanced 60/30/10
| WR | 15y | 20y | 25y | 30y | 35y | 40y |
|---|---|---|---|---|---|---|
| 2.0% | 100.0% | 100.0% | 99.8% | 99.1% | 98.4% | 95.9% |
| 2.5% | 100.0% | 99.8% | 99.1% | 96.9% | 93.1% | 88.9% |
| 3.0% | 100.0% | 99.4% | 97.2% | 92.0% | 84.2% | 76.3% |
| 3.5% | 99.9% | 98.4% | 92.8% | 82.2% | 70.5% | 60.9% |
| 4.0% | 99.8% | 96.2% | 83.8% | 68.3% | 56.3% | 43.8% |
| 4.5% | 99.1% | 91.0% | 70.5% | 54.9% | 38.6% | 28.4% |
| 5.0% | 98.2% | 81.0% | 58.3% | 37.8% | 25.4% | 16.7% |
| 5.5% | 95.5% | 68.7% | 44.0% | 24.6% | 15.0% | 10.3% |
| 6.0% | 90.1% | 56.7% | 29.4% | 14.8% | 9.4% | 5.0% |
At 4%, the balanced portfolio survives 68.3% of simulated 30-year retirements — a failure rate of nearly 1 in 3. The safe withdrawal rate at 95% confidence is just 2.5%. Even at 90% confidence, it only reaches 3.0%.
Aggressive Portfolio (80/15/5)
More equities means higher expected returns but also higher volatility. The sequence-of-returns risk is the killer here: a bad drawdown in the early years of retirement is catastrophic when you're simultaneously withdrawing.
Survival probability (%) — Aggressive 80/15/5
| WR | 15y | 20y | 25y | 30y | 35y | 40y |
|---|---|---|---|---|---|---|
| 2.0% | 100.0% | 99.8% | 99.0% | 97.5% | 95.4% | 92.3% |
| 2.5% | 100.0% | 99.3% | 97.5% | 93.6% | 89.6% | 84.0% |
| 3.0% | 99.8% | 98.3% | 94.1% | 87.3% | 79.7% | 73.3% |
| 3.5% | 99.4% | 96.6% | 88.1% | 77.8% | 68.5% | 60.4% |
| 4.0% | 98.7% | 91.9% | 79.6% | 67.1% | 57.7% | 48.7% |
| 4.5% | 98.0% | 85.4% | 68.4% | 56.8% | 43.5% | 34.7% |
| 5.0% | 95.3% | 76.4% | 58.8% | 43.1% | 31.7% | 25.6% |
| 5.5% | 91.4% | 68.0% | 47.7% | 32.4% | 23.1% | 17.7% |
| 6.0% | 84.6% | 57.6% | 35.9% | 23.2% | 15.8% | 11.8% |
The aggressive portfolio actually performs worse than the balanced portfolio at the same withdrawal rates. At 4% over 30 years, survival drops to 67.1%. The SWR at 95% confidence is just 2.0%.
This is counterintuitive but important: more equities don't help if you're withdrawing during a drawdown. The higher volatility creates more paths where early losses permanently impair the portfolio.
Run Your Own Numbers
Enter your portfolio allocation, pick a retirement horizon and confidence level, and get your safe withdrawal rate with a full survival heatmap — in seconds.
Open SWR CalculatorSWR Summary: What Can You Actually Withdraw?
| Profile | 20-year SWR | 25-year SWR | 30-year SWR | 35-year SWR | 40-year SWR |
|---|---|---|---|---|---|
| Conservative | 4.5% | 3.5% | 3.0% | 2.5% | 2.5% |
| Balanced | 4.0% | 3.0% | 2.5% | 2.0% | 2.0% |
| Aggressive | 3.5% | 2.5% | 2.0% | 2.0% | 0.0% |
All values at 95% confidence. Every single profile falls below the 4% rule at 30 years. The traditional retirement portfolio (balanced 60/40) supports just 2.5%.
How Much Does Confidence Level Matter?
The confidence level is the probability that your portfolio survives the full retirement horizon. Higher confidence means a lower withdrawal rate. Here's how the balanced portfolio's 30-year SWR changes:
| Confidence | 30-year SWR | Annual from $1M |
|---|---|---|
| 99% | 2.0% | $20,000 |
| 95% | 2.5% | $25,000 |
| 90% | 3.0% | $30,000 |
| 85% | 3.0% | $30,000 |
| 80% | 3.5% | $35,000 |
Even at a relatively relaxed 80% confidence level — meaning you're comfortable with a 1-in-5 chance of running out of money — the balanced portfolio only reaches 3.5%. The 4% rule doesn't appear at any reasonable confidence level.
How This Compares to ERN's Research
Karsten Jeske's (Big ERN) Safe Withdrawal Rate Series is the gold standard for SWR research in the FIRE community. His methodology differs from ours in important ways:
- Historical vs. forward-looking: ERN uses historical U.S. returns (1871–present), which includes the most successful equity market in history. We use J.P. Morgan's forward-looking assumptions, which are more conservative.
- CAPE-based adjustments: ERN adjusts for starting valuations using the CAPE ratio. Our Monte Carlo approach handles this implicitly through lower expected returns.
- Dynamic strategies: ERN's later parts explore glidepaths, variable spending, and guardrails. Our baseline analysis uses fixed withdrawals, which is the worst case.
Despite these differences, the conclusions converge. ERN consistently finds that 4% is too aggressive for early retirees and recommends 3.25–3.5% for 60-year horizons. Our forward-looking simulations show even lower numbers at 95% confidence, which aligns with ERN's observation that sequence-of-returns risk is particularly dangerous when starting valuations are high.
What You Can Do About It
The point of this analysis isn't to scare you out of retirement. It's to help you plan realistically. Several strategies can improve your sustainable withdrawal rate:
1. Flexible spending
The fixed withdrawal assumption is the worst case. If you can reduce spending by 10–20% during bear markets, your SWR improves significantly. ERN's research on “guardrails” and “CAPE-based rules” shows that modest flexibility can add 0.5–1.0% to your sustainable rate.
2. Part-time income
Even modest income in the first 5–10 years of retirement dramatically reduces sequence-of-returns risk. $20,000/year in part-time income has a similar effect to adding 1% to your withdrawal rate.
3. Delay Social Security
Delaying Social Security from 62 to 70 increases your benefit by ~77%. This creates a guaranteed income floor that reduces the burden on your portfolio in later years.
4. Bond tent / rising equity glidepath
Starting retirement with a higher bond allocation (to buffer sequence risk) and gradually increasing equities over 10–15 years can improve outcomes. This is one of ERN's most powerful findings.
5. Lower fees
Our simulations include a 0.5% annual management fee. Reducing to 0.1% (achievable with low-cost index funds) effectively adds 0.4% to your real return — which compounds dramatically over 30+ years.
Important Caveats
Forward-looking assumptions aren't predictions
J.P. Morgan's capital market assumptions represent their best estimate of annualized returns over the next 10–15 years. They've been publishing these since 1996 and have a reasonable track record, but they are not predictions. Actual returns will differ.
Monte Carlo has limitations
Our simulation uses lognormal returns with Cornish-Fisher adjustments for skew and kurtosis, which captures fat tails better than pure lognormal. However, it still can't model regime changes, structural breaks, or black swan events in the way historical data can.
The 0.5% fee assumption matters
If you use low-cost index funds with expense ratios around 0.05–0.10% and no advisor fee, your SWR would be higher. Conversely, if you pay a 1% advisor fee plus fund expenses, it would be lower.
This is a fixed-withdrawal analysis
Real retirees don't withdraw a fixed inflation-adjusted amount regardless of market conditions. Most adjust spending. The SWR numbers here represent the conservative floor — the rate that works even if you never adjust.
Further Reading
- Big ERN's Safe Withdrawal Rate Series — The most comprehensive public SWR research, running to 60+ parts. Start with Part 1.
- The original Trinity Study — Cooley, Hubbard, and Walz (1998), “Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable.”
- J.P. Morgan 2026 LTCMA — Published annually by J.P. Morgan Asset Management. The assumptions we used are from the 2026 edition.
- Wade Pfau's research — See How Much Can I Spend in Retirement? for an accessible overview of modern SWR research.
Go Deeper With Portfolio Lab
Full Monte Carlo withdrawal analysis is just one module. Portfolio Lab also optimizes across 27 asset classes, backtests over 23 years, and runs 10,000-path simulations — all powered by J.P. Morgan capital market assumptions.
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Full Methodology
All results were computed using Portfolio Lab's withdrawal analysis engine. The simulation generates 1,000 Monte Carlo paths with the following parameters:
- Starting value: $1,000,000
- Return model: Lognormal with Cornish-Fisher skew/kurtosis adjustment
- Correlation structure: Full covariance matrix from J.P. Morgan 2026 LTCMA
- Inflation: Stochastic, CPI-linked (2.4% expected, 30% portfolio correlation)
- Withdrawals: Fixed percentage of starting value, inflation-adjusted annually
- Rebalancing: Annual to target weights
- Management fee: 0.5% annually
- Withdrawal rates tested: 2.0% to 8.0% in 0.5% steps
- Horizons tested: 15, 20, 25, 30, 35, 40 years
- SWR defined as: highest withdrawal rate with >= X% survival (X = confidence level)
- Seed: 42 (deterministic for reproducibility)
You can reproduce these results yourself using the SWR calculator.