The Evolution of the 4% Rule And Why Retirees in Portland, Oregon and Vancouver, Washington Are Hearing 3.8% Instead

The Evolution of the 4% Rule And Why Retirees in Portland, Oregon and Vancouver, Washington Are Hearing 3.8% Instead

For decades, the “4% rule” has guided retirement planning: start with a 4% withdrawal of your portfolio in year one and increase that amount with inflation each year, with the goal of lasting about 30 years.¹

But financial research has evolved and so have local retirement planning assumptions, especially for areas like Portland and Vancouver, where longer life expectancy can affect how long your money needs to last.²

Local Longevity Trends: Portland & Southwest Washington

Retirement planning isn’t just about markets it’s about how long people live.

Portland Life Expectancy

Health and demographic analyses put Portland’s average life expectancy above the national and state norms — around 80.7 years. That’s several years longer than the U.S. average, meaning many Portland retirees will spend >>30 years in retirement.

Vancouver / Clark County Trend

Detailed county-level data for Clark County (which includes Vancouver, WA) shows average life expectancy in the high 78–79 years range, roughly in line with Washington state averages but still above the national mean.³

 Broader Regional Context

Both Oregon and Washington have historically ranked near the top of U.S. states for life expectancy — significantly above the national average — thanks to regional lifestyle and health factors. Children born in these states historically could expect to live around the high 70s.⁴

Why Life Expectancy Matters for Retirement Withdrawals

Longevity is a central input in retirement planning assumptions:

• A longer life expectancy generally means a longer time horizon — sometimes 30+ years — for your portfolio to support withdrawals.
• Historical benchmarks like the 4% rule were based on broad U.S. averages that may not reflect the longevity of residents in Portland/Vancouver.
• If you retire at age 65 and statistically may live to 80–82 (or longer), your retirement plan must sustain withdrawals longer — especially in light of rising healthcare costs and long-term care considerations.

This is exactly why many planners have shifted from a rigid 4% rule to something closer to 3.8%, or even lower — especially when local life expectancy suggests longer retirement horizons.^5-7

From 4.0% to 3.8%: What Changed?

Market Assumptions Are Lower

Forward-looking return expectations for stocks and bonds have generally softened compared to historical averages that supported 4.0% sustainable withdrawals. That’s pushed recent research to recommend starting rates in the 3.7–3.8% range. (This reflects updated capital market assumptions and risk tolerances.)⁸

Sequence & Longevity Risk

Longer expected lifespans amplify the risk of sequence-of-returns — poor market returns early in retirement have a bigger impact when savings must last longer.⁹

Real-World Costs

Local costs like housing, healthcare (and potentially long-term care), and lifestyle choices in the Portland–Vancouver metro area put additional pressure on sustainable withdrawal planning.¹⁰

What 3.8% vs. 4% Means for You

On a $1,000,000 portfolio:

• 4.0% start: ~$40,000 in year 1
• 3.8% start: ~$38,000 in year 1

That $2,000 difference may seem modest, but over multiple decades — especially with longer life expectancy — it can materially improve the likelihood of your plan enduring through your 80s and beyond.¹¹

Higher longevity translates directly into more retirement years to fund, which is why planners in the Pacific Northwest increasingly use 3.8% or a range like 3.5%–4% rather than treating 4% as a fixed rule.¹²

The Bigger Picture: Flexibility > Fixed Rules

Rather than rigidly sticking to a percentage, many planners now use:

• Dynamic withdrawal strategies
• Variable guardrails based on portfolio performance
• Spending adjustments in down markets

These approaches help manage risk without sacrificing too much lifestyle flexibility.¹³

Regional Takeaways

✔ Portland’s longer life expectancy (~80.7 years) suggests a retirement horizon that may exceed the assumptions behind the classic 4% rule.¹⁴
✔ Clark County/Vancouver averages (~78–79 years) still exceed national averages, reinforcing the need for realistic withdrawal planning.¹⁵
✔ Combined with changing market assumptions, this supports why many advisors today lean toward 3.8% or a flexible planning range.¹⁶

About Harlow Wealth Management

Harlow Wealth Management, Inc. is an independently owned and operated advisor. Our retirement planning advisors in Vancouver serves clients living in the greater southwest Washington and Portland metropolitan areas, with an office in Vancouver, WA. While our firm was officially created in 2005, our founder, Danny Harlow, has been serving the retirement financial planning needs of the Vancouver, WA and Portland, OR community since 1973. We focus on helping those who are retired or about to retire by building a customized retirement strategy. 

 

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References

1. Bankrate. (2024, September 27). What is the 4% rule for retirement withdrawals? Bankrate. https://www.bankrate.com/retirement/what-is-the-4-percent-rule/
2. OneDigital Financial Academy. (2025, January 3). The impact of longevity on retirement planning. OneDigital. https://www.onedigital.com/blog/the-impact-of-longevity-on-retirement-planning/
3. Dookeran, J. (2024, September 7). If you live in these 8 cities, you might live the longest in the U.S. TheTravel.com. https://www.thetravel.com/cities-where-people-live-the-longest-in-the-us/ (life expectancy for Portland, Oregon).
4. OPB News. (2022, September 2). Washington and Oregon among states with longest life expectancy, but pandemic hurt. Oregon Public Broadcasting. https://www.opb.org/article/2022/09/02/washington-and-oregon-among-states-with-longest-life-expectancy-but-pandemic-hurt/
5. LetsMakeAPlan.org. (2025, September 24). Planning financially for living to 100 in the longevity economy. Let’s Make a Plan. https://www.letsmakeaplan.org/financial-topics/articles/retirement-planning/planning-financially-for-living-to-100-in-the-longevity-economy/
6. Financial Planning Association. (2025, April 1). How clients can sustain real withdrawals beyond 30 years. https://www.financialplanningassociation.org/learning/publications/journal/APR25-how-clients-can-sustain-real-withdrawals-beyond-30-years-OPEN
7. Citizens Bank. (n.d.). What is the 4% rule in retirement? https://www.citizensbank.com/learning/four-percent-rule-of-retirement.aspx
8. Planadviser. (2024, December 11). Morningstar drops recommended safe withdrawal rate to 3.7 %. Planadviser. https://www.planadviser.com/morningstar-drops-recommended-safe-withdrawal-rate-3-7/
9. Charles Schwab & Co., Inc. (2025). What is sequence-of-returns risk? Charles Schwab. https://www.schwab.com/learn/story/timing-matters-understanding-sequence-returns-risk
10. ERI Economic Research Institute. (n.d.). Cost of living in Portland, OR. ERI. https://www.erieri.com/cost-of-living/united-states/oregon/portland
11. Planadviser. (2024, December 11). Morningstar drops recommended safe withdrawal rate to 3.7 %. Planadviser. https://www.planadviser.com/morningstar-drops-recommended-safe-withdrawal-rate-3-7/
12. Planadviser. (2024, December 11). Morningstar drops recommended safe withdrawal rate to 3.7 %. Planadviser. https://www.planadviser.com/morningstar-drops-recommended-safe-withdrawal-rate-3-7
13. Pine Grove Financial Group. (2025, March 13). Retirement withdrawal strategies: Comparing the 4% rule and guardrails approach. Pine Grove FG. https://pinegrovefg.com/retirement-withdrawal-strategies-comparing-the-4-rule-and-guardrails-approach/
14. Banse, T. (2022, September 2). Washington and Oregon among states with longest life expectancy, but pandemic hurt. Oregon Public Broadcasting. https://www.opb.org/article/2022/09/02/washington-and-oregon-among-states-with-longest-life-expectancy-but-pandemic-hurt/
15. Dookeran, J. (2024, September 29). If you live in these 8 cities, you might live the longest in the U.S. TheTravel.com. https://www.thetravel.com/cities-where-people-live-the-longest-in-the-us/
16. FOX 13 Seattle. (2024, August 26). Washington ranks 11th in states with longest life expectancy. https://www.fox13seattle.com/news/washington-ranks-11th-life-expectancy

Past performance is not indicative of future results. The material above has been provided for informational purposes only and is not intended as legal, tax, or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed, and Harlow Wealth Management, Inc. (“Harlow”) makes no representation or warranty as to the accuracy or completeness of the information, which should not be used as the basis of any investment decision. Information contained on third party websites that Harlow may link to is not reviewed in their entirety for accuracy, and Harlow assumes no liability for the information contained on these websites. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from Harlow. For more information about Harlow, including our Form ADV brochures, please visit https://adviserinfo.sec.gov and search our firm name.