The State of Retirement Income: 2025

Morningstar

Research

54 Pages

Morningstar analyzes how much retirees can safely withdraw from their portfolios in a world of higher yields and moderate inflation. The paper updates its forward looking safe withdrawal estimates using capital market assumptions and Monte Carlo simulations across asset allocations and time horizons. It also tests flexible spending rules, Social Security timing, TIPS ladders and annuities under various real world risk scenarios.

Date published: December 3, 2025

Key Takeaways

Safe withdrawal baseline: Base case analysis finds a sustainable starting withdrawal that balances income needs with a 30 year horizon.
Real world risks: Scenarios like early poor returns, early inflation, longer lifespans and long term care shocks can strain fixed spending plans.
Flexible spending tools: Dynamic withdrawal methods plus delayed Social Security and TIPS or annuities can increase income potential while trading off stability.
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