The percentage of an investment portfolio someone can withdraw each year, adjusted for inflation, with a high historical probability of not running out of money over a long retirement — most commonly cited around 4%.
It's the speed limit for spending down your savings. Take out too much each year and you risk draining the account before you die; take out too little and you're needlessly working longer or living smaller than you need to. The safe withdrawal rate is an attempt, based on historical market data, to find the number that balances those two risks.
It's derived from studying how various withdrawal rates would have performed across decades of real historical market returns — including recessions, crashes, and inflation spikes — to find a rate that survived nearly all of them over a 30-year retirement.