It can be difficult to determine how much money you can withdraw from your retirement savings each year without depleting your accounts.Many financial advisors prefer the safe withdrawal rate method – typically set at 4% -- for establishing a starting retirement income. The SWR looks at historic sequences of down markets, then it figures the safest rate of income to withdraw during those times. The problem with the SWR is it does not factor a person’s subsequent income once they reach retirement age and beyond. Many advisors prefer dynamic updating, which factors in changes to income as a person ages by using simulations to reflect yearly transitions, to determine a more sensible income rate. Return sequence risk, which is the possibility of experiencing low or negative returns during some point in retirement, is something retirees can’t avoid. The amount that can safely be withdrawn will always hinge upon returns from previous years. Sometimes retirees spend too much when their portfolio is down, resulting in a portfolio’s failure to last as long as expected. The length of time they’re to take distributions from the portfolio is key, and usually a withdrawal rate’s main determinant. A higher rate increases the chance of running out of money, which is why some advisors recommend curtailing withdrawals at certain times.