Free | 4% initial-rate scenario

4% rule calculator

The 4% rule is a historical heuristic: it sets an initial withdrawal amount at 4% of a starting portfolio. Historical study outcomes do not predict future results.

The 4% rule's actual definition · AAII summary of the 1998 historical withdrawal study

$1M portfolio at 4% = $40,000 in year one

The 1998 Trinity Study tested historical US portfolio mixes over defined withdrawal periods. Its results describe those data and assumptions, not future success probabilities or a universally safe rate.

The 4% calculation is a first-year arithmetic scenario; compare other rate assumptions and plan for your own horizon, taxes and costs.

How to Use the 4% Rule for Retirement Withdrawals

Estimate the first-year withdrawal at a chosen rate; historical results are context, not a promise of future income.

Step 1
Enter your portfolio value
Total of all retirement-account assets (401(k), Roth IRA, taxable brokerage). Exclude home equity, cars, and an emergency cash buffer.
Step 2
Calculate a first-year amount
At an assumed 4% initial rate, a $1,000,000 portfolio gives $40,000 for year one. Historical results do not guarantee that amount can be maintained for a particular retirement.
Step 3
Compare horizon assumptions
Consider the intended duration and compare multiple rates. Longer horizons add uncertainty; do not infer a universally safe rate from historical periods alone.
Step 4
Account for inflation
If a plan raises a $40,000 withdrawal by 3% to preserve purchasing power, the next nominal amount is $41,200. Actual plans may use other rules.
Step 5
Compare return assumptions
Test several rates and remember that a constant-return calculator does not model the order of market returns or establish plan robustness.

The 4% rule, in plain English

The 4% heuristic sets the first withdrawal at 4% of the starting portfolio. Some historical methods then adjust that dollar amount for inflation in later years. See the AAII summary of the historical withdrawal study; historical outcomes are not forecasts.

If you choose a $1.5M portfolio and 4% initial rate, the year-one amount is $60,000; at 3% inflation, the next nominal amount is $61,800. This is arithmetic, not a longevity forecast.

Annual withdrawal by portfolio size

Portfolio	3% assumption	3.5% assumption	4% assumption	5% assumption
$500k	$15k	$17.5k	$20k	$25k
$1.0M	$30k	$35k	$40k	$50k
$1.5M	$45k	$52.5k	$60k	$75k
$2.0M	$60k	$70k	$80k	$100k
$3.0M	$90k	$105k	$120k	$150k

When 4% fails

Sequence-of-returns risk: withdrawals during declines can make the order of returns matter.
Long horizons: do not extrapolate 30-year historical study results to longer plans without stating the added uncertainty.
Portfolio and costs: outcomes vary with allocation, fees, taxes and inflation.
Spending rules: fixed withdrawals and flexible withdrawals produce different cash-flow paths.

4% Rule Calculator FAQ

Where does the 4% rule come from?

Bengen and the Trinity researchers analyzed historical US stock and bond portfolios using specified return periods and withdrawal rules. These backtests describe past sequences under defined assumptions; they do not establish future success probabilities.

Is the 4% rule still valid in 2026?

The 4% figure is a historical heuristic, not a forecast. Future returns, inflation, taxes, fees, portfolio mix and spending choices may differ from the periods studied. Compare clearly labeled scenarios rather than treating one rate as assured.

What's the difference between 4% rule and 25× rule?

The numbers are arithmetic inverses: a 4% initial withdrawal equals 25 times that first-year spending amount. The 25x shortcut describes a target; neither expression guarantees portfolio longevity.

Should I really use 4% for a 50-year retirement?

The historical studies cited here tested defined periods, including 30-year horizons. A 50-year plan is outside that window and has more uncertainty; test assumptions and spending flexibility without treating a particular rate as safe for everyone.

Does the 4% include taxes?

A withdrawal amount is not necessarily spendable income. Tax treatment depends on account type, jurisdiction and individual circumstances; model taxes separately when estimating net spending.

What if I can spend flexibly in bad years?

Flexible spending rules can change withdrawals after portfolio gains or losses, so income may vary. The effect depends on the rule and spending choices; no fixed percentage increase in success applies to every plan.

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Methodology and editorial standards

Each calculator uses its own inputs and method. Review the labels, units and assumption notes shown with the result. Costs, taxes, fees, benefits and other factors are not modeled unless the page or calculator explicitly says they are. A fixed-rate projection is a scenario, not a forecast or personalized recommendation.

The editorial standards explain how Snowballr reviews calculators and sources. The sources index links to references used across the site. To report an error or suggest a correction, use the contact page.