In simple terms, a safe withdrawal rate is the amount of money that a saver can withdraw from his retirement funds each year, while still ensuring that there would be enough money to last for the rest of his life.
The safe withdrawal rate should take the rate of inflation into consideration, as future withdrawals might be higher as the cost of living increases. Ideally, savers who adhere to the safe withdrawal rate should have enough money to last their entire lifetime, with plenty of leftover capital for future generations to inherit.
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