Ask a room of working Americans what a $100,000 nest egg pays per year in retirement, and the answers scatter across a range wide enough to swallow the correct one.
That is what the National Institute on Retirement Security found in its Retirement Insecurity 2026 report, released August 26. Respondents under 67 who had not yet retired were asked how much annual income they could draw from $100,000 "throughout your retirement" if they retired at 67. Only 9% landed near the answer financial professionals would give.
The Distribution
NIRS benchmarked the question against the four percent rule, the common guideline under which a retiree withdraws roughly 4% of the starting balance in year one and adjusts for inflation afterward. On $100,000, that is about $4,000 the first year.
- 4% of respondents said $3,000 to $3,999, and 5% said $4,000 to $4,999. That is the 9%.
- 19% said $10,000 to $14,999.
- Another 19% said $25,000 or more, a quarter of the balance every year.
- In total, 50% expected to draw $10,000 or more per year.
NIRS ran the arithmetic on the optimistic half. At a 6% post-retirement return, $10,000 annual withdrawals from $100,000 last 15 years, to age 82. Yet 77% of women and 68% of men who reach 67 in average health are expected to live past 82. Withdrawals of $25,000 a year would not make it to age 72.
Why the Miss Matters
The number people guess for $100,000 is the number they scale up when they set a savings target. If $100,000 produces $10,000, then $400,000 looks like a $40,000-a-year retirement. Under the 4% guideline it produces $16,000.
The same survey found 35% of workers believe they need at least $1 million to retire securely, while 47% of respondents have less than $100,000 saved, including 18% with nothing. 52% did not start saving until age 30 or later. Dan Doonan, NIRS executive director, said Americans "are telling us that retirement security is becoming harder to achieve as they struggle with the affordability of everyday life."
The Guideline Is a Range, Not a Law
The 4% figure is a benchmark, not a promise. Morningstar's State of Retirement Income research, published in February, put the base-case safe starting withdrawal rate for a 2026 retiree at 3.9%, up from 3.7% the prior year, for a portfolio holding 30% to 50% in stocks with a 90% chance of lasting 30 years. Retirees willing to cut spending after bad market years could start closer to 5.7%. Higher bond yields drove the increase.
Every one of those rates sits far below what half the survey respondents assumed.
Practical Takeaways
- Learn the conversion once. Multiply a balance by 0.04 for a rough first-year income. Multiply an income need by 25 for a rough savings target. A $30,000 annual gap implies roughly $750,000.
- Add Social Security before you panic. The 4% math covers only what the portfolio must supply. Subtract your estimated benefit from ssa.gov first.
- Do not treat the return as the withdrawal. A 6% average return does not mean you can spend 6%. Sequence risk, inflation, and longevity eat the difference.
- Flexibility buys rate. Morningstar's higher figure depends on cutting spending in down years. If your budget cannot flex, plan around the lower number.
- Reassess if you started late. Catch-up contributions after 50, and the higher limit at ages 60 to 63, exist for exactly this case.
Sources: National Institute on Retirement Security, Retirement Insecurity 2026: Americans' Views of Retirement (August 26, 2026); Morningstar, The State of Retirement Income 2026 (February 2026); InvestmentNews coverage of the NIRS report (August 28, 2026).