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A new report from Morningstar recommends the safe withdrawal rate for retirees in 2025 is a mere 3.7% — a significant adjustment from the decades-old 4% rule that had dominated retirement planning.
For 2025, you’ll be able to increase your annual contribution to your 401(k), 403(b), governmental 457 plans, and the federal government's Thrift Savings Plan to $23,500, up from $23,000.
A safe withdrawal rate is now 3.7% instead of 4.00%. This downward revision was driven by lower future projected returns for investments and by the fact that life spans are getting longer.
It concluded that you'd have a 75% chance of stretching a balanced portfolio with a 5.6% withdrawal rate for 25 years. ... those over 50 can get extra tax benefits by making catch-up contributions ...
For 2025, the annual employee contribution limit for 401(k) plans is set to increase from $23,000 in 2024 to a record high of $23,500. ... In 2025, retirement savers aged 50 and over can still ...
Using this method, your annual withdrawal amount might be calculated this way: Account balance: $500,000. Life expectancy: 34.2 years (based on IRS tables) Annual withdrawal: $500,000 / 34.2 ...
The new withdrawal rate is based on a conservative retirement savings portfolio that consists of 20% to 40% in stocks, 10% in cash, and the rest in bonds with a 30-year time horizon, according to ...
On top of these amounts, workers aged 50 and older can add up to $7,500 more annually as a catch-up contribution in 2025, the same amount as 2024. Starting in 2025, the catch-up contribution for ...