Volume 16: The Lockshield Letter
Mar 31, 2026
Episode 13: Distribution Rate
Understanding Distribution Rates
Episode Description
In this episode, we break down distribution rates—also known as withdrawal rates—and why they play such a critical role in making your retirement savings last. A distribution rate is simply the percentage of your portfolio that you withdraw each year to support your lifestyle, but determining the “right” amount is where things get more complex. We discuss the classic 4% rule, often considered a starting point for a safe withdrawal rate, and how it has been used as a guideline for balancing income needs with long-term sustainability.
One of the biggest factors impacting your withdrawal strategy is something you can’t control: the sequence of market returns. The order in which markets rise and fall—especially early in retirement—can have a significant impact on how long your portfolio lasts, even if average returns look strong over time. Understanding how distribution rates and market timing interact can help you make more informed decisions and build a plan that’s flexible enough to adapt to changing conditions.
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