How to use this 4% rule calculator
- Choose what you want to find. "What I can spend" takes your savings and returns the first-year withdrawal. "What I need" takes your yearly spending and returns the savings it requires.
- Set the withdrawal rate (4% by default) and how many years the money must last (30 by default, the horizon the rule was built for).
- Open "Portfolio" to set your stock and bond mix and fees. Then read the success rates, the 3%-5% comparison, the worst start years and the charts.
How do you calculate the 4% rule?
There are two versions of the same formula, depending on which number you already know.
- From savings to spending: first-year withdrawal = savings × 0.04. With $750,000, that is $30,000.
- From spending to savings: savings needed = yearly spending ÷ 0.04, which is the same as spending × 25. Spending $60,000 a year needs $1,500,000.
The part people miss is what happens after year one. You do not take 4% of whatever the balance is each year. You take last year's dollar amount and raise it by inflation. Starting at $40,000 with 3% inflation, you would withdraw $41,200 in year two, $52,191 in year ten and $94,263 in year thirty. Each of those buys about the same groceries and rent as the first, which is the point of the rule: steady spending power whatever markets do.
4% rule table: what your savings pay
| Savings | At 3% | At 3.5% | At 4% | At 4.5% |
|---|---|---|---|---|
| $500,000 | $15,000 | $17,500 | $20,000 | $22,500 |
| $750,000 | $22,500 | $26,250 | $30,000 | $33,750 |
| $1,000,000 | $30,000 | $35,000 | $40,000 | $45,000 |
| $1,500,000 | $45,000 | $52,500 | $60,000 | $67,500 |
| $2,000,000 | $60,000 | $70,000 | $80,000 | $90,000 |
4% rule table: savings you need
| Yearly spending | At 3% | At 3.5% | At 4% | At 4.5% |
|---|---|---|---|---|
| $40,000 | $1,333,333 | $1,142,857 | $1,000,000 | $888,889 |
| $60,000 | $2,000,000 | $1,714,286 | $1,500,000 | $1,333,333 |
| $80,000 | $2,666,667 | $2,285,714 | $2,000,000 | $1,777,778 |
| $100,000 | $3,333,333 | $2,857,143 | $2,500,000 | $2,222,222 |
| $150,000 | $5,000,000 | $4,285,714 | $3,750,000 | $3,333,333 |
First-year amounts, in today's dollars. Lowering the rate from 4% to 3.5% raises the savings you need by 14%, and lowering it to 3% raises it by 33%. That is why the choice of rate matters more than almost any other planning assumption.
Where does the 4% rule come from?
Financial planner William Bengen published the original study in 1994. Using US stock, bond and inflation data from 1926 on, he replayed a withdrawal that started at a set share of the portfolio and rose with inflation every year. A 4% start never ran out of money in less than 33 years, while 4.25% could fail in 28, so he advised clients to withdraw no more than 4% early in retirement. He called an initial 5% risky and 6% or more "gambling", and recommended holding 50% to 75% in stocks[1].
In 1998, three Trinity University professors ran a similar test on 1926-1995 data with the S&P 500 and long-term high-grade corporate bonds. With inflation-adjusted withdrawals over 30 years, 4% succeeded in 95% of periods with 100% stocks, 98% with 75% stocks and 95% with half stocks, while 3% succeeded in all of them[2]. Together, the two papers are the source of the "4% rule".
Bengen has since revised his own number. In his 2025 book A Richer Retirement he raised it from 4.15% to 4.7% after adding small, mid and micro-cap US stocks and international stocks to the portfolio[3]. Morningstar, using forecasts instead of history, puts the safe starting rate at 3.9% for 30 years with a 90% success target[4]. The rule is a rough midpoint of serious estimates, not a law.
What does the 4% rule assume?
The headline number only holds under the conditions it was tested in. Five of them matter most.
- Inflation-adjusted, fixed withdrawals. You never cut spending after a crash or raise it after a boom. If you would adjust in practice, that is extra safety margin the rule doesn't count.
- A 30-year retirement. Bengen's test was whether the money lasted at least 30 years, and Trinity's longest payout period was 30 years. Longer retirements need a lower rate (see below).
- US market history. US returns have been unusually kind to retirees. Across 17 developed countries, Wade Pfau found that a 4% real withdrawal would have been safe over 30 years in only 4 of them, even with optimistic assumptions[7].
- No fees and no taxes. The Trinity study did not adjust for taxes or transaction costs[2], and Bengen assumed tax-deferred accounts[1]. A 4% withdrawal is a gross amount; taxes come out of it.
- Spending down to zero is fine. Trinity counted a retirement as a success if it ended with any money at all. Requiring the starting balance to survive changes the answer a lot: in Karsten Jeske's tests, 4% with 100% stocks over 30 years went from 97% success to 80% when the full initial capital had to be preserved[6].
How often did the 4% rule work?
We replayed every 30-year retirement that started between 1928 and 1996 using Damodaran's annual returns for the S&P 500, 10-year Treasuries and inflation through 2025[10]. With 60% stocks and 0.1% in fees, the calculator's defaults, 4% lasted 30 years in 94% of 69 start years. The 4 that ran out began in 1965, 1966, 1968 and 1969, just ahead of a decade of weak stocks and high inflation, and the quickest lasted 25 years.
| Rate | Lasted 30 years (history) | Monte Carlo | Median left from $1M |
|---|---|---|---|
| 3% | 100% | 98% | $2,144,650 |
| 3.5% | 100% | 95% | $1,716,013 |
| 4% | 94% | 90% | $1,331,516 |
| 4.5% | 84% | 84% | $1,106,296 |
| 5% | 70% | 76% | $774,935 |
Our calculation, 60% stocks / 40% 10-year Treasuries rebalanced yearly, 0.1% fees, balances in today's dollars. The Monte Carlo column draws 2,000 retirements from randomly ordered years of the same data.
Two things stand out. First, the typical outcome at 4% was not running out: it was ending richer. The median 30-year retirement still held $1,331,516 after inflation, and 43 of 69 start years finished above the $1,000,000 they began with. At 3% no start year failed and the median ending balance was $2,144,650. Second, the step from 4% to 5% is steep: success fell from 94% to 70%, and the worst start year ran out after only 17 years.
Why the 4% rule usually works
Withdrawing 4% a year for 30 years and ending at exactly zero only needs a steady return of about 1.3% a year after inflation. Over most 30-year stretches a mix of stocks and bonds earned far more than that. The rule fails when the bad years come first: withdrawals during a crash sell more shares at low prices, and those shares are not there for the recovery. Michael Kitces found that real returns in the first decade of retirement explain most of the variation in safe withdrawal rates, with a correlation of about 0.79[8]. That is sequence-of-returns risk, and it is why the calculator shows the worst start years and not just an average.
Does the 4% rule work for 40, 50 or 60 years?
Less reliably. The longer the money must last, the more chances a bad decade has to arrive early, and the less time is left to recover.
| Years at 4% | Start years tested | History | Monte Carlo |
|---|---|---|---|
| 30 years | 69 | 94% | 90% |
| 40 years | 59 | 85% | 81% |
| 50 years | 49 | 67% | 76% |
| 60 years | 39 | 62% | 70% |
Our calculation, same mix and fees. Jeske's longer data set, back to 1871, shows the same pattern: 4% with a 50/50 portfolio had about 95% success over 30 years but only about 65% over 60 years[5]. If you are retiring in your 40s or early 50s, a rate between 3% and 3.5% is a more realistic starting point. The safe withdrawal rate calculator finds the highest rate that met your own target for any retirement length, and our guide to the 4% rule covers the research in depth.
How do fees change the 4% rule?
Fees come out of returns every year, so they act like a permanently weaker market. At 4% over 30 years, the share of start years that lasted was 94% with no fees, 90% with 0.5% and 84% with 1%. The original studies assumed no fees at all. If you pay an advisor 1% a year, a 4% withdrawal is really asking your portfolio for roughly 5%.
Is the 4% rule too conservative?
Often, in hindsight. The Trinity authors themselves called 3% and 4% "exceedingly conservative" for stock-heavy portfolios[2], and our backtest above shows the median retiree ending with more than they started. But you only get one retirement and cannot know in advance whether you are retiring in 1966 or 1982. The rule is sized for the bad start years, which is why it leaves money on the table in the good ones.
If you can cut spending in a downturn, you can usually start higher. Morningstar estimates that retirees willing to let spending fluctuate can start near 6%[4]. Be realistic about the size of those cuts, though: under Guyton-Klinger guardrails, a 1966 retiree starting at 4% would have had to cut withdrawals as low as $16,400 a year, 59% below plan[9]. Even Bengen showed that a small, early cut helps: a 1929 retiree who trimmed withdrawals by 5% had 20% more wealth by 1949[1].
Is the 4% withdrawal before or after taxes?
Before. The 4% is what leaves the portfolio, and any income tax on it comes out of that amount, so a $40,000 withdrawal can buy less than $40,000 of spending. How much less depends on which accounts you draw from and your tax situation. The simplest fix is to add your expected tax bill to the spending figure before you divide by 0.04, so the rule sizes a portfolio that covers both.
When should you use a different rate?
- Use less than 4% if you expect more than 30 years of withdrawals, pay high fees, hold mostly bonds or cash, want to leave the full balance to heirs, or cannot cut spending in a bad year. 3.5% lasted 30 years in 100% of start years at the defaults.
- You may be able to use more if your horizon is shorter than 30 years, Social Security or a pension will cover a large share of spending later, or you will genuinely spend less when markets fall.
Whatever you choose, revisit it. The rule sets your first withdrawal; it does not stop you from checking your plan each year and adjusting if markets or your life change.