A Withdrawal Rate is the percentage of an investment portfolio that an investor withdraws each year, typically during retirement. It helps determine how long a portfolio may last while continuing to generate income.

One commonly discussed guideline is the 4% rule, which suggests withdrawing approximately 4% of a portfolio annually. However, the optimal withdrawal rate depends on market conditions, investment returns, inflation, and individual circumstances.

Understanding withdrawal rates is essential for retirement planning and creating sustainable passive income.