Morningstar and Bengen Research Put Safe Retirement Withdrawal Rates Far Below Dave Ramsey's 8% Target

Dave Ramsey recommends an 8% annual withdrawal rate, based on his assumption that a stock-heavy portfolio will average 12% returns per year. Two studies published over the past year place the safe withdrawal ceiling far below that target.
Morningstar's 2026 State of Retirement Income report pegs the safe starting rate at 3.9% for a 90% probability of lasting 30 years, up from 3.7% in the prior edition. The base case assumes a balanced portfolio with 30% to 50% in equities. Retirees willing to accept some fluctuation in annual spending can start at a rate approaching 6%.
William Bengen, who created the 4% guideline in 1994, raised his safe maximum to 4.7% in his 2025 book, "A Richer Retirement," after expanding to a seven-asset-class portfolio. On a $1 million account, that lifts year-one income from $40,000 to $47,000, below the $80,000 an 8% rate would take.
An 8% withdrawal also raises sequence-of-returns risk. A 25% early decline would leave roughly $690,000 after an $80,000 first-year draw, making the next $80,000 withdrawal about 12% of the remaining balance. At a 4% starting rate, the same downturn leaves $720,000, and the next draw equals roughly 6%.