4% Rule Calculator

About this calculator

The 4% Rule is a retirement withdrawal guideline stating that a retiree can withdraw 4% of their investment portfolio’s value in the first year of retirement, then adjust that dollar amount for inflation each subsequent year, with a reasonably high probability the money will last at least 30 years. It comes from the “Trinity Study,” which back-tested historical stock and bond returns to find a sustainable withdrawal rate.

Working backward, the rule also gives a simple retirement savings target: multiply desired annual spending by 25 (the inverse of 4%) to estimate the portfolio size needed to retire. It’s widely used as a starting point in the FIRE (Financial Independence, Retire Early) community and by financial planners, though critics note it was tested on a specific historical period and market conditions, sequence-of-returns risk, and fees can all affect whether 4% still holds up for any individual retiree.