BUSINESS

Forget the growth charts. Your burn rate is quietly writing your company’s future.

The Los Angeles Dodgers receive news that a former World Series champion with a unique tie to one of their former MVPs has died.

Iran’s strike on Qatar’s Ras Laffan — the world’s largest LNG export hub — has triggered a natural gas supply crisis that dwarfs the oil price story.

Taylor Swift debuts “Elizabeth Taylor” on the Pop Airplay chart at No. 30, earning her milestone fiftieth hit on the competitive radio roster.

Shares of Rivian (RIVN) and Uber (UBER) have both been under pressure in recent months, as investors weigh profitability concerns and slowing growth expectations.Rivian stock has dropped more than 33% from its December 52-week high and is down about 24.3% year to date.Uber stock is down roughly 9% this year and has fallen about 22% since its Nov. 4 earnings report. Both stocks are underperforming the S&P 500, which has slipped about 5% year to date.That backdrop makes their latest move especially important.Uber, Rivian robotaxi deal could reshape growth outlookOn March 19, Rivian and Uber announced a major robotaxi partnership that could reshape both companies’ growth stories.Uber plans to invest up to $1.25 billion in Rivian and deploy as many as 50,000 fully autonomous R2 vehicles on its platform.The vehicles are expected to launch in San Francisco and Miami in 2028, with expansion to as many as 25 cities across North America and Europe by 2031.“We’re big believers in Rivian’s approach, designing the vehicle, compute platform, and software stack together, while maintaining end-to-end control of scaled manufacturing and supply in the U.S.,” Uber CEO Dara Khosrowshahisaid in a press release.The partnership gives Rivian a large-scale commercial path for its autonomous driving technology, backed by a well-capitalized partner.And for Uber, it brings the possibility that robotaxis could become a key upside driver.

Uber’s strategy is likely to become a platform for autonomous vehicles rather than owning them directly.Getty Images

Rivian earnings highlight ongoing profitability challengesThe news comes shortly after Rivian reported quarterly results that showed improving performance but ongoing losses.For the fourth quarter, Rivian reported an adjusted loss of 54 cents per share, narrower than the 68-cent loss expected. Revenue reached $1.29 billion, beating estimates of $1.26 billion, CNBC reported.Related: Bank of America has a stark message for investors buying the dipFor the full year 2025, revenue rose 8% to about $5.4 billion. The company also reported its first annual gross profit of $144 million.However, that profit was driven largely by Rivian’s software and services segment, including its joint venture with Volkswagen, which helped offset $432 million in losses in its automotive business.The company is expected to remain unprofitable as it ramps production of its lower-cost R2 vehicle.Alongside the Uber deal, Rivian said it no longer expects adjusted EBITDA to turn positive in 2027, citing increased research and development spending tied to its autonomous driving roadmap, according to an SEC filing.Rivian now expects an adjusted EBITDA loss of between $2.1 billion and $1.8 billion in 2026.Morgan Stanley: Uber stock upside may not be priced inMorgan Stanley sees the partnership as a positive development for Rivian and a potentially bigger opportunity for Uber stock.For Rivian, the firm said the deal validates its autonomous driving platform and provides additional capital support.Related: Morgan Stanley has a stark message for investors in Palantir stocks“Similar to Rivian’s joint venture with Volkswagen, the deal brings in funding from a well-capitalized partner investing heavily in autonomous driving,” the firm said.For Uber, Morgan Stanley said the deal “further advances its strategy of enabling multiple autonomous vehicle players within a rapidly developing AV ecosystem.”Uber also announced partnerships with Amazon’s Zoox, Motional, Wayve, and Nvidia, reflecting its potential strategy to become a platform for autonomous vehicles rather than owning them directly.That strategy may not yet be reflected in Uber’s valuation.“With Uber’s U.S. rides business arguably trading at a low single digit EBITDA multiple, success in autonomy is not currently reflected in the valuation and could become a meaningful driver of multiple expansion,” Morgan Stanley said.Related: J.P. Morgan pushes back on Fed’s 2026 rate-cut forecast

“The money is tax-free and does not affect our income, which comes from investments and Social Security.”

Something unusual happens when you put the phrase “guaranteed income for life” in front of most retirees. Their eyes light up, then they hear the word annuity, and the conversation is over before it starts.That reaction is understandable. Annuities have spent decades buried under layers of bad press, sky-high fees, and sales tactics that benefited advisors far more than clients. But not every annuity was built the same way, and the blanket avoidance has cost some retirees tens of thousands of dollars in missed tax savings and guaranteed income.There is one type that stands apart from the rest: the qualified longevity annuity contract, better known as a QLAC. It is not the annuity your broker has been pitching you. It is simpler, cheaper, and specifically designed to solve the two problems that keep most retirees up at night: running out of money and paying too much in taxes during retirement.If you have a traditional IRA or a 401(k), you need to understand how this works. Because once RMDs kick in at age 73, your options start to narrow, and the window for setting up a QLAC properly starts to close.What a QLAC does to your retirement incomeA QLAC is a deferred income annuity that you fund using money from a traditional IRA, 401(k), 403(b), or 457(b) account. You pay a lump sum to an insurance company today, and in return, the insurer guarantees you a fixed monthly income starting at a future date of your choosing, up to age 85.What makes it different from a standard annuity is the tax treatment. The IRS allows you to remove up to $210,000 from your retirement account balance for the purposes of calculating your required minimum distributions (RMDs). That exclusion, established under Treasury regulations and significantly expanded by the SECURE 2.0 Act, can meaningfully reduce your taxable income for years potentially through age 85, the maximum deferral age permitted under IRS rules. The reason matters for your monthly budget. Lower RMDs mean lower adjusted gross income.Lower adjusted gross income means you may avoid the income thresholds that trigger higher Medicare Part B and Part D premiums, known as IRMAA surcharges, and you may also reduce the amount of your Social Security benefits that are subject to federal income tax.Why so many retirees overlook QLACs, and what that silence costs themThe annuity market is crowded and confusing, and most of what gets sold under the annuity label is not a QLAC. Variable annuities loaded with riders, indexed annuities tied to the performance of equity benchmarks, and immediate annuities with complex payout structures dominate the sales landscape. The QLAC, by contrast, is stripped down by design.More Social Security: AARP raises a red flag on Social Security, MedicareDave Ramsey warns Americans on Social Security, 401(k)sDave Ramsey warns of big Social Security problemThere are no market-linked returns. There is no annual fee schedule that grows alongside the contract. You put the money in, you name a start date, and the insurer pays you for as long as you live. That simplicity is, ironically, what makes it hard for some financial advisors to promote, because there is little complexity to justify an ongoing fee.Life expectancy is a deeper issue for retireesThe deeper problem is longevity literacy. A research paper from the TIAA Institute found that only 32 percent of U.S. adults correctly understood life expectancy for a 65-year-old today. That misunderstanding has a direct consequence: retirees routinely underestimate how long their income needs to last, and they build retirement plans calibrated for a shorter runway than reality demands. Consider the numbers from the Social Security Administration: A 65-year-old man today can expect to live to approximately age 84, and a 65-year-old woman can expect to live to around age 86. Related: Is Ohio a tax-friendly state for retirees?The Society of Actuaries estimates that a couple both reaching age 65 has a 50 percent chance that one spouse will live to age 93. That is a 28-year retirement, minimum, for the survivor.A QLAC is specifically built for that tail risk, which is the last decade of retirement when Social Security and dwindling savings may not be enough to cover housing, health care, and long-term care costs that only accelerate with age.How the numbers work: a realistic scenarioHere is a concrete example that puts this in plain terms. Suppose you are 65 years old with a $1 million traditional IRA. You decide to allocate $200,000 to a QLAC and set your income start date for age 80. During those 15 years, the funds in the QLAC are excluded from your RMD calculations entirely.According to modeling published by the Financial Planning Association, a 65-year-old who allocates $200,000 to a QLAC with payments beginning at age 80 could receive approximately $44,000 per year for the rest of their life on a single-life annuity basis. If they lived to age 95, that translates to roughly $660,000 in total income from a $200,000 initial premium. That is not guaranteed growth in the market sense. It is a guaranteed income stream, which is a fundamentally different tool serving a fundamentally different purpose. You are not trying to beat the S&P 500. You are trying to ensure that your essential expenses, such as food, housing, and health care, remain covered, regardless of what the market does in your 80s.Key QLAC limits you need to knowMaximum contribution is $210,000 per individual across all eligible retirement accounts.Eligible accounts include Traditional IRA, 401(k), 403(b), 457(b); Roth IRAs do not qualify.Income must begin no later than age 85, per IRS rules.Married couples can each contribute up to $210,000 separately.The $210,000 limit is indexed for inflation annually under SECURE Act 2.0.A return-of-premium option is available, allowing heirs to receive unused funds.The $210,000 cap was significantly expanded under the SECURE Act 2.0 of 2022, which removed the previous 25 percent of account balance restriction. That change made QLACs genuinely accessible to a broader range of retirees, not just those with very large account balances.

Retirees often dismiss annuities too quickly, overlooking simpler options like QLACs that can reduce taxes and guarantee income later in life.Pelaez/Getty Images

Where a QLAC fits in your retirement income planA QLAC is not a full retirement solution. It is a specific tool for a specific gap: the income risk that exists in your 80s and beyond, after other income sources may have diminished or stopped entirely. According to a 2024 National Center for Health Statistics report, more than half of all residents of long-term care facilities are over the age of 85.Related: Top unexpected retirement costs (and solutions)A separate survey by Allianz Life found that nearly two of three U.S. adults said they were more worried about running out of money in retirement than about dying. A QLAC directly addresses that fear with a contractual guarantee, not a projection or a Monte Carlo simulation.Think of it as a floor under your late-retirement budget. You structure the rest of your portfolio, including Social Security, RMD income from the remainder of your IRA, and taxable investments, to cover you from retirement through your late 70s. The QLAC activates precisely when those other sources may be running thin.Cases where a QLAC may not be the right fitYou have poor health and do not expect to live significantly beyond average life expectancy.You need liquidity: QLAC funds are locked in with no lump-sum withdrawal once purchased.You use a Roth IRA as your primary retirement vehicle, since Roth accounts are ineligible.Your primary goal is leaving a large estate, since the QLAC reduces assets available to heirs unless you select the return-of-premium option.You have very little in pre-tax retirement savings, and the $210,000 cap is not a meaningful allocation for your situation.What you should do before your RMD age arrivesThe best time to evaluate a QLAC is before age 73, when your first RMD kicks in. Once RMDs begin, you can still purchase a QLAC, but the tax planning opportunity is more limited. Your goal is to carve out the QLAC allocation before the IRS starts calculating your annual distribution requirement.The ideal approach is to make the QLAC decision while you are still in the initial stages of your RMD planning, according to Fidelity actuary Tom Ewanich. Structuring it early gives you the longest possible deferral window and maximizes your eventual monthly payout. The longer the deferral, the larger the income stream when payments begin.Practical steps to evaluate whether a QLAC is right for youReview your traditional IRA and 401(k) balances to identify what portion could be allocated to a QLAC without disrupting your early retirement income plan.Calculate your projected RMDs using the IRS Uniform Lifetime Table at IRS.gov to understand how a $200,000 QLAC allocation would reduce your annual taxable withdrawals.Compare quotes from multiple insurers, since QLAC pricing varies meaningfully across providers, and the same premium can produce different monthly income guarantees.Ask about the return-of-premium option if estate planning is a priority; the monthly income will be lower, but your heirs can recover the unused principal.Consult a fee-only fiduciary advisor who does not earn a commission on annuity sales, so the recommendation is based on your plan rather than their payout.One practical mistake to avoid: treating the $210,000 QLAC limit as a target rather than a ceiling. Your actual allocation should be sized to cover a specific income gap in your late retirement, not simply to maximize the allowable investment. Over-allocating can reduce your liquidity during the years when you may need accessible cash most.The annuity most retirees need but few have consideredThe irony of the annuity conversation in America is that the products most widely marketed are often the most complex and the most expensive. The QLAC, which is arguably the most straightforward and the most directly useful for longevity risk, barely registers in most retirement planning conversations.You do not need to buy every type of annuity. You do not need an indexed annuity, a variable annuity, or a product bundled with income riders that generate ongoing fees. But if you have significant pre-tax retirement savings and you are approaching age 73, a QLAC deserves a serious look before your RMD planning is finalized.A 65-year-old couple today has a 50 percent chance that one spouse reaches age 93. That is nearly three decades of retirement. No projection, no withdrawal rate, and no diversified portfolio guarantees income that far into the future. A QLAC does.Related: Record Annuity Sales Mask Growing Capital Concerns for U.S. Life Insurers

The Federal Reserve held its benchmark interest rate unchanged at its March 17-18 meeting, a move that investors had widely anticipated given still-sticky inflation and a relatively stable job market.But the real question for investors is what comes next — not just for interest rates, but for a broader economy that’s absorbing shocks to crucial energy markets in real time.According to a new Fidelity Viewpoints newsletter, investors who hoped the Fed could offer certainty may have been disappointed. Fed Chair Jerome Powell made it clear that policymakers are still parsing the implications of the Iran conflict and the recent swings in energy and labor data and that, for now, they face the same uncertainty as investors.Here is more, according to Fidelity, on what investors learned from the March Fed meeting, plus the three big unknowns to watch that may shape the Fed’s next moves.Why the Fed held steady: Inflation and jobsInvestors had been expecting a “hold” decision at this meeting well before the Iran conflict. Although the job market has continued to show sluggishness, which might tip the scales toward additional rate cuts, it has not shown signs of a sharp deterioration. More Federal Reserve:Fed Chair Powell sends frustrating message on future interest-rate cutsMeanwhile, in other areas the economy has appeared to start 2026 on firm footing. New manufacturing orders — a closely watched leading indicator — have picked up, and tax-related stimulus is beginning to reach consumers and businesses. With inflation still sticky and above target, the data didn’t give the Fed a persuasive reason to resume cutting rates.Although the Middle East conflict adds a new variable to the Fed’s balancing act, the added uncertainty has only strengthened the case for holding policy steady, says Andrew Garvey, lead monetary policy analyst on Fidelity’s Asset Allocation Research Team.“From the Fed’s point of view, there was no strong reason to do anything right now,” he says. “Geopolitical developments have actually given them even more reason to pause, given the heightened uncertainty, and wait for more information.”Three unknowns shaping the Fed’s next movesFrom here, the outlook for Fed policy becomes much more uncertain as the Fed faces new economic crosswinds on multiple fronts. Here are the key unknowns about how the Iran conflict could impact the Fed’s mission and moves — even as a change in leadership for the central bank looms.

Federal Reserve Bank of New York via FRED®

How significantly will energy-market disruptions impact inflation?With oil prices rising markedly since the start of the conflict, there’s little doubt that headline measures of inflation, like the Consumer Price Index (CPI) and Personal Consumption Expenditures Index (PCE), will show an impact once March data is released. Yet as Garvey notes, the Fed pays closer attention to “core” inflation measures, which strip out energy and food prices (which tend to be highly volatile) and give a clearer read on underlying inflation trends.That means policymakers may be less concerned with the immediate jump in prices at the pump, and more attentive to whether higher energy costs start filtering into the prices of goods and services across the economy as companies find their own energy costs rising. Moreover, the key question for the Fed is not simply whether core inflation rises this month or next, but whether any increase represents a one-time price hike, or marks a longer-term change in the inflation trendline.Will energy disruptions take a toll on economic growth?When consumers have to spend more on energy, they may eventually start to cut back elsewhere. This can hurt overall economic growth or in extreme cases even lead to a recession. Importantly, U.S. households spend a smaller share of their income on energy today than they did during past energy shocks, which could provide some resiliency against a moderate increase. Also, the United States is now a net energy exporter, so increased energy production and capital expenditures could also provide some support to economic activity.Yet another way energy prices can impact growth is through corporate profit margins, notes Aditi Balachandar, research analyst on Fidelity’s fixed income team. If companies lack pricing power and are unable to pass rising costs on to consumers, their profit margins could begin to compress over time. Eventually, this could begin to weigh on hiring and capital expenditure decisions, filtering into broader economic growth. Any tightening in financial conditions could also negatively impact consumer spending.Ultimately, any growth impact may depend on how high energy prices rise and how long they stay elevated.How will the Fed leadership transition unfold?There is only one more Fed meeting before Powell’s term as Chair expires on May 15. (However, if the Senate has not confirmed a successor by that time, he could continue to serve for a period as acting Chair.)While many investors expect nominee Kevin Warsh to take a somewhat more dovish approach if confirmed, a new Fed Chair may have to spend some time building consensus and credibility with the other Federal Open Market Committee members and understanding the full range of views around the table. That adjustment period could itself introduce a degree of policy uncertainty at a moment when the economic outlook is already in flux.Where does the Fed think the economy may be going?The Fed released updated economic projections, or its “dot plot,” at its March meeting, which show Fed officials’ best estimates for where interest rates and the economy may be heading next.These showed that the median of members expects one 25 basis-point cut over the course of 2026. Related: Fed split holds as Iran war scrambles rate pathBased on median projections, Fed officials are also now expecting slightly higher inflation and slightly higher economic growth for calendar 2026 than they were previously. The projections showed no change to members’ median expectation for unemployment in 2026.Members also reported somewhat more uncertainty around their economic projections than at the December meeting.What investors should watch, and do, nextAs the Fed waits for clearer evidence, investors can do the same. A few indicators may offer the earliest clues about how the current energy situation and broader uncertainties are feeding into the economy — which may influence where the Fed goes from here:March inflation trends. Headline CPI and PCE will capture the immediate effect of higher energy prices, but the more important signal might be whether core inflation shows an impact.Business sentiment and new-orders surveys. Garvey notes that surveys of small-business hiring and investment intentions, plus new manufacturing orders, may provide early indicators of broader impacts on economic growth.Energy prices — and how long they stay elevated. Single-day or intra-day price spikes may be unlikely to change the course of the broader economy. A sustained period of higher prices would carry more meaningful implications for both inflation and growth.For many investors, the most important move right now is simply not to overreact to a volatile moment, and to stay focused on fundamentals rather than headlines. Learn more from Fidelity about avoiding investing missteps in the current market, and how to navigate periods of market volatility.)What the Fed dual mandate requires for jobs, pricesThe Fed’s dual congressional mandate requires it to balance full employment and price stability.Lower interest rates support hiring but can fuel inflation.Higher rates cool prices but can weaken the job market.The two goals often conflict, operate on different timelines and are influenced by unpredictable global events like pandemics and wars. The FOMC voted 11-1 to hold the benchmark Federal Funds Rate steady at 3.50% to 3.75% for the second meeting of 2026.Related: J.P. Morgan pushes back on Fed’s 2026 rate-cut forecast

When you get used to shopping at Costco regularly, you actively make the choice to maintain a membership. For most people, that $65 or $130 fee more than pays for itself, though, in the form of savings during the year. But a Costco membership doesn’t just buy you access to a gigantic store full of inventory. It also buys you access to an experience you may not find at other stores.Costco doesn’t just try to aim for the lowest prices. It also aims to make members feel valued, whether by frequently introducing new perks or maintaining its extremely flexible return policy.Some of Costco’s best deals are also designed with member retention in mind. And there’s perhaps no better deal than the $1.50 hot dog and soda combo. That deal has been around for more than 40 years. And in a viral video, Costco CEO Ron Vachris confirmed that it’s also not going anywhere anytime soon.Costco CEO doubles down on hot dog meal valueIn a social media video that’s taken the internet by storm, Vachris didn’t just talk about how incredible the hot dog deal is. He experienced it himself.Sitting down to enjoy one of Costco’s famous hot dogs, he reassured members that the deal isn’t going anywhere.Related: Costco’s big bets pay off for members, employees“The hot dog price will not change as long as I’m around,” he said, calling it “amazing quality, amazing value.” Vachris also called the deal “$1.50 well spent.”That may sound like a gimmick, but it’s part of a much bigger philosophy. Costco has held that $1.50 price steady since the 1980s, even though inflation alone would justify a much higher price today.For members, that meal is more than just a cheap lunch. It’s a commitment on Costco’s part to delivering standout value, even when it’s not the most profitable move.

Costco is holding hot dog prices at $1.50, the same price it’s been for decades. Shutterstock

Costco’s member-first mindsetHolding the $1.50 price point steady on the hot dog meal isn’t the only example of Costco’s commitment to a great member experience. The company is investing in ways to make members happier. During Costco’s most recent earnings call, CEO Ron Vachris highlighted many ways the company is working to improve. In the context of tariffs, he said, “Throughout the past year, we have taken action to reduce the impact of tariffs; in many cases, we did not pass the full cost on to our members.”Vachris also pointed out ways the company is trying to streamline the checkout experience — an often painful component of shopping at Costco, especially during peak periods. “We are also piloting automated pay stations that will allow members to pay for their pre-scan orders seamlessly with an average transaction time of around eight seconds. Early results show this is improving the flow of traffic,” he said.More Retail:Costco sees major shift in member behaviorRetail chain shuts all locations as legal changes hit industryCostco makes major investment in online shopping for membersT-Mobile launches free offer for customers after major lossAll told, Vachris’s message is a positive one for current and prospective Costco members alike. The company is committed to a great experience and continued value, whether it’s less expensive toilet paper or a hot dog combo price that’s hard to beat. At a time when consumers are increasingly scrutinizing every dollar they spend, that commitment could be one of Costco’s biggest competitive advantages at a time when retailers are fighting for business.Maurie Backman owns shares of Costco.Related: Sam’s Club fixes problem that’s a major pain point at Costco

You saved for decades, watched compound interest do its thing, and finally crossed the retirement finish line with a solid nest egg. Now comes the question that keeps many new retirees up at night: how much of that portfolio can you actually spend each year?For roughly 30 years, millions of Americans have defaulted to the same answer, a tidy little number baked into the financial planning canon.  You take 4% of your portfolio in year one, adjust for inflation every year after, and hope the math holds for three decades.The problem is that research now shows this approach was never designed to maximize your spending in retirement.  It was built for the absolute worst-case scenario, and clinging to it could mean dying with a pile of money you never enjoyed.A major new study puts hard numbers on just how much retirees are leaving behind by refusing to be flexible with withdrawals.Morningstar pegs the new safe withdrawal rate at 3.9%The State of Retirement Income report by Morningstar found that 3.9% is the highest safe starting withdrawal rate for new retirees. That figure assumes a 40% stock and 60% bond portfolio, a 30-year time horizon, and a 90% probability of not running out of money.  Researchers Amy C. Arnott, Christine Benz, and Jason Kephart used forward-looking return and inflation assumptions to reach that number. On a $1 million portfolio, a 3.9% withdrawal means you get $39,000 in year one, adjusted for inflation in every subsequent year.  That is up slightly from the 3.7% Morningstar recommended in 2024, thanks to modestly improved return expectations across asset classes. However, the critical finding buried inside this research is not the base-case number you should be focused on reading closely.  The real story is that retirees willing to accept some flexibility in their annual spending can safely start at rates approaching 6%.The 4% rule was never meant to be your retirement spending planBill Bengen introduced the 4% rule in a 1994 paper published in the Journal of Financial Planning, based on historical U.S. stock and bond returns dating back to 1926. His research found that a retiree withdrawing 4% of a balanced portfolio in year one and adjusting for inflation each year after would not run dry over 30 years.  The figure was rounded down from 4.15%, and it stuck as a default guideline for an entire generation of retirement planning. Bengen himself has since revised the figure upward, most recently suggesting 4.7% as the worst-case historical safe withdrawal rate.  He told CNBC in 2025 that retirees who stick with just 4% are likely “cheating themselves a little bit” of the retirement they earned.The key difference between Bengen’s approach and Morningstar’s is that Morningstar uses forward-looking return and inflation projections instead of historical data. That forward-looking lens explains why Morningstar’s base-case number has bounced between 3.3% in 2021 and 3.9% in 2025 alongside shifting market conditions.Five flexible strategies that can boost your starting withdrawal rateMorningstar tested multiple dynamic withdrawal methods against its conservative base case of fixed inflation-adjusted spending each year. Every single flexible strategy the researchers examined supported a higher starting safe withdrawal rate than the 3.9% base case.The guardrails approachDeveloped by financial planner Jonathan Guyton and computer scientist William Klinger, this method ties your withdrawals to portfolio performance.  You spend less when markets drop and give yourself a raise when your portfolio grows beyond a set threshold in a given year.Morningstar’s research found this approach supports a 5.2% starting withdrawal rate on a 40% stock and 60% bond portfolio.  On a $1 million portfolio, that is $52,000 in year one compared with $39,000 under the rigid base case, a $13,000 annual difference.The required minimum distribution methodYou can mirror the framework behind IRS required minimum distributions, dividing your portfolio value by your life expectancy each year.  This method produced some of the highest lifetime spending totals in Morningstar’s simulations across all tested portfolio allocations.The trade-off is significant: the RMD method ended with a median portfolio balance of just $120,000 after 30 years in Morningstar’s testing.  If you want to leave a meaningful inheritance, this approach will likely not align with your broader estate planning goals at all.The constant percentage methodThis straightforward approach applies the same fixed percentage to your portfolio balance at the start of each year.  Your spending rises when markets climb and falls when your portfolio drops, but you can never fully deplete your savings using this method.More Personal Finance:Why selling a home to your child for a dollar can backfireElon Musk says ‘universal high income’ is comingFTC, 21 states sue Uber over ‘shady’ subscription billingMorningstar found this method supports one of the highest starting withdrawal rates, though year-to-year income can swing considerably. A 90% floor on initial spending can help prevent drastic cuts, ensuring your annual income never drops below 90% of your first-year withdrawal.Forgoing inflation adjustments after portfolio lossesThis simple tweak asks you to skip your annual inflation raise in any year following a decline in your portfolio’s total value.  You never actually cut your nominal spending under this method, meaning you just hold steady and wait for the portfolio to recover.Morningstar found that this strategy delivers a modest boost to starting withdrawal rates compared with the base case, while preserving spending consistency year to year. If you want the closest thing to a fixed paycheck with slightly more spending power at the outset, this approach sits at the conservative end.The endowment methodUniversity endowments use a version of this strategy, withdrawing a set percentage of the portfolio’s average value over a rolling 10-year window. Smoothing your withdrawal base over a decade reduces the impact of any single bad year on your annual income, keeping cash flows steadier.Morningstar’s testing showed the endowment approach supports one of the highest starting rates alongside the constant percentage method. You will still experience year-to-year variation, but the swings are far less extreme than taking a flat percentage of each year’s balance.The real cost of rigid withdrawals on a $1 million portfolioNumbers make the stakes concrete, so consider a retiree entering retirement today with exactly $1 million in a balanced portfolio. Under the 4% rule, year-one spending is $40,000, and you adjust that for inflation going forward, regardless of what the market does.Related: Retirees may earn more with a MYGA than a savings accountUnder Morningstar’s guardrails approach at 5.2%, that same retiree pulls $52,000 in year one, a $12,000 boost right at the gate. Over just the first five years of retirement, the difference in cumulative spending can exceed $60,000, yielding additional income.Those early retirement years are precisely when you are most likely to be active, healthy, and able to enjoy travel, dining, and experiences. Christine Benz, Morningstar’s director of personal finance, has argued that underspending early in retirement is a genuine risk for many retirees.Research from Morningstar also confirms that spending tends to naturally decline as retirees age, following a pattern economists call the “retirement spending smile.”  Acknowledging that decline and planning around it can raise your safe starting rate by roughly a full percentage point, according to the same study.Your asset allocation plays a bigger role than you probably thinkYou might assume loading up on stocks would give you the highest safe withdrawal rate, but the Morningstar data tells a different story. Portfolios with equity weightings between 30% and 50% delivered the best outcomes for retirees using fixed withdrawal strategies over 30 years.Higher stock allocations introduce more volatility, which actually lowers the safe starting withdrawal rate under conservative spending systems designed for stability.  That is because sequence-of-returns risk, or the danger of steep losses in early retirement, can permanently damage a heavily stock-weighted portfolio.However, the picture shifts for retirees using flexible strategies, where equity-heavy portfolios supported higher lifetime spending in Morningstar’s simulations.  The key takeaway is that your withdrawal method and your asset allocation need to work together as a matched pair, not in isolation.

Clinging to the 4% rule can feel safe, but it may quietly hold retirees back from fully enjoying their savings.MoMo Productions/Getty Images

Social Security and annuities can make flexible strategies even more effectivePortfolio withdrawals are only one piece of retirement income, and Morningstar’s research emphasizes the role of guaranteed income sources alongside investments.  Delaying Social Security is one of the highest-value moves a new retiree can make, especially when paired with a dynamic withdrawal approach.Retirees who delayed Social Security benefits and combined them with the guardrails method achieved the highest lifetime spending totals.  The predictable income from Social Security acts as a buffer, making year-to-year portfolio spending adjustments far easier to emotionally absorb.Related: Social Security funds could shrink by 2032Morningstar also explored Treasury Inflation-Protected Securities as a standalone income tool, finding that a 30-year TIPS ladder supports a 4.5% withdrawal rate.  The catch is that TIPS ladders are self-liquidating, meaning your entire portfolio is spent down to zero at the end of 30 years with nothing remaining.Annuities can also help fill the gap between essential expenses and guaranteed income, though Morningstar’s researchers note important caveats around liquidity and costs.  The broader lesson is that the more of your essential expenses covered by predictable income, the more aggressively you can spend from your portfolio.Sequence-of-returns risk can wreck even the best withdrawal planMorningstar’s 2025 research found that retirees who experienced poor returns in the first five years and did not adjust their spending were far more likely to go broke. This is sequence-of-returns risk in action, and it is the single biggest threat to any retirement withdrawal plan, regardless of the starting rate.If you retire into a bear market and keep pulling the same dollar amount from a shrinking portfolio, you are selling low at the worst possible time.  Flexible strategies protect against this by automatically reducing your spending when the portfolio drops, preserving capital for the eventual market recovery.High inflation early in retirement compounds the damage, since your cost-of-living adjustments force ever-larger withdrawals from an already-stressed nest egg.  If you retired during the 2022 bear market while inflation hit 9.1%, a rigid withdrawal plan would have taken a serious hit to long-term sustainability.Choosing the right strategy depends on what you actually value most in retirementMorningstar’s research makes one thing clear: there is no single withdrawal rate that works for every retiree, regardless of their circumstances. Your ideal strategy depends on your tolerance for spending swings, your non-portfolio income, and whether you want to leave assets to heirs.Questions to ask yourself before picking a withdrawal methodCan your Social Security and pension income cover essential expenses like housing, food, insurance, and healthcare without portfolio withdrawals?Are you comfortable with your annual spending dropping by 10% to 15% in a bad market year if it means more spending overall?Do you want to maximize lifetime spending for yourself, or is leaving a significant inheritance to your children a top priority?Is your retirement time horizon closer to 20 years or 40 years, since shorter horizons safely support higher rates above 5%?Would you implement a complex method like guardrails on your own, or would you need a certified financial planner to help?If you prize paycheck-like consistency above everything else, the base-case fixed real withdrawal at 3.9% is designed exactly for that purpose.  If you want to maximize spending during your healthiest years and can handle some variability, guardrails or the RMD approach deserve serious consideration.Related: The hidden cost of retirement withdrawal rates