Retirement funding rate
Learn what the retirement funding rate measures and how to interpret it alongside other plan results.
The retirement funding rate describes how much annual retirement spending must be supported by investments, relative to the investable assets available when retirement begins.
How Alpha Retire calculates it
For each retirement year, the plan adds expenses and taxes, then subtracts external income such as employment income, pensions, and government retirement benefits. A year cannot have a funding need below zero.
The Summary displays the average annual funding need across retirement years as a percentage of investable assets at the beginning of retirement.
How to interpret it
A higher rate means the plan asks the investment portfolio to fund more spending relative to its starting size. A lower rate means external income covers more of the projected spending need, the portfolio is larger, or both.
The measure is a planning indicator rather than a withdrawal rule. It does not show the timing of withdrawals, market volatility, or which accounts provide the money. Review it alongside Probability of Success and the Cash Flow report.