About the 4% Rule Calculator
This 4% rule calculator applies a safe withdrawal rate to your retirement portfolio. Enter your savings and a withdrawal rate to see your first-year income; each later year the withdrawal rises with inflation, exactly as in the original “4% rule” research. The calculator then tracks the balance year by year to show how long the money lasts at your expected return.
It is built for people planning early or traditional retirement, FIRE savers checking their number, and retirees deciding how much they can spend. It also solves the maximum withdrawal rate that would spend the portfolio down to exactly zero over your chosen horizon, and the portfolio you need for a given spending target (the “25× rule” at 4%).
The projection uses a constant average return, so it cannot capture sequence-of-returns risk — a bad market in the first few years can sink a plan that looks fine on averages. Treat the result as a baseline, and use a Monte Carlo or sequence-of-returns tool to stress-test it.
With the default inputs, the first-year withdrawal is $40,000.00. Change any value above to recalculate instantly.
How to use the 4% rule calculator
- 1Enter your portfolio value at retirement.
- 2Choose an initial withdrawal rate — 4% is the classic starting point for 30 years.
- 3Set a realistic long-run return and inflation rate.
- 4Enter how many years retirement must last and the yearly spending you need.
- 5Check how long the money lasts, then compare your rate with the maximum sustainable rate.
Formula and method
The 4% rule sets the first-year withdrawal W₀ as a percentage w of the starting portfolio P, then raises the dollar amount by inflation i every year regardless of market performance. Each withdrawal is taken at the start of the year and the rest earns the expected return r. The portfolio “lasts” as long as the balance can cover the full inflation-adjusted withdrawal.
The maximum sustainable rate solves P = W₀ × Σ((1+i)/(1+r))^t over the retirement length, i.e. the withdrawal whose present value exactly equals the portfolio. The portfolio needed for a spending target is simply spending ÷ w, which is 25× spending at 4%.
- P
- Starting portfolio value
- w
- Initial withdrawal rate
- i
- Annual inflation adjustment to withdrawals
- r
- Expected annual portfolio return
- t
- Year of retirement, starting at 0
Worked examples
$1 million with the classic 4% rule
Year one you withdraw $40,000 ($3,333 a month) and raise it 3% a year. With a 6% return the portfolio still holds about $1.06 million after 30 years and would cover 42 years of withdrawals. On these average returns the rate that spends it to exactly zero in 30 years is about 4.90%.
5% withdrawal with lower returns
Withdrawing $50,000 and growing it 3% a year while earning only 5% covers only 24 full years of withdrawals — short of a 30-year retirement. About 4.34% would have lasted exactly 30 years.
Early retiree planning for 45 years
At 3.5% a $1.5 million portfolio supports $52,500 in year one. To fund $50,000 of spending at 3.5% you would need about $1.43 million. On average returns the money covers 85 years of withdrawals, and up to about 4.24% would last 45 years, leaving margin for bad early markets.
3% withdrawal that never runs out
Withdrawing 3% ($30,000) while earning 7% and raising spending 3% a year means the portfolio keeps growing faster than withdrawals, so on these constant returns it is still funding withdrawals after 100 years. Spending $40,000 at 3% would need about $1.33 million (33.3× spending).
Frequently asked questions
What is the 4% rule?+
The 4% rule says you can withdraw 4% of your portfolio in the first year of retirement and increase that dollar amount with inflation each year, with a high historical chance of the money lasting 30 years. It comes from William Bengen’s 1994 study of US stock and bond returns and the later Trinity study.
Is 4% still a safe withdrawal rate?+
It depends on valuations, interest rates, your asset mix and how long retirement lasts. Many planners use 3.3%–4% for 30 years and lower rates, around 3%–3.5%, for 40+ year early retirements; flexible spending rules can safely allow more.
How much do I need to retire using the 4% rule?+
Multiply the annual spending you need from your portfolio by 25. For example, $40,000 a year requires about $1,000,000. Subtract Social Security or pension income from your spending first, since that part does not need to come from savings.
What is sequence-of-returns risk?+
It is the danger that poor returns early in retirement, while you are withdrawing, permanently damage the portfolio even if the long-run average is fine. This calculator uses a constant return, so pair it with a sequence-of-returns or Monte Carlo simulator.
Should I adjust withdrawals in bad years?+
Flexible rules — skipping inflation raises after a loss, or using guardrails that cut spending by 10% when the withdrawal rate climbs too high — have historically let retirees start at a higher rate with a similar or lower risk of running out.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.