How the 4% rule works
The 4% rule says that if you withdraw 4% of your portfolio in the first year of retirement and then raise that dollar amount with inflation each year afterwards, the money has historically lasted about three decades. It comes from William Bengen's 1994 study and the later Trinity study, both of which ran historical U.S. stock and bond returns through rolling 30-year retirement windows.
This calculator runs that plan year by year. It takes your starting rate to set the first withdrawal, grows each following withdrawal with your inflation assumption, applies your expected return to what is left, and reports the ending balance and the year the portfolio would run out. Enter a target annual spending figure and it also divides by the same rate to show the portfolio that spending would require.
Figures are on a 2026 basis and are an estimate, not a guarantee. The model uses one flat return every year, so it cannot show sequence-of-returns risk, which is the single biggest threat to a withdrawal plan. It also ignores taxes, advisory fees, healthcare shocks, Social Security and any pension income. Try several rates and returns, and discuss the result with a financial professional before acting on it.
Frequently asked questions
William Bengen's 1994 study and the later Trinity study tested historical U.S. stock and bond returns over 30-year retirements and found that an initial 4% withdrawal, raised each year with inflation, survived the worst historical starting points.
A poor run of returns in the first few years shrinks the pool that the rest of your retirement compounds from, so two portfolios with the same average return can end very differently. This calculator uses one flat return, which hides that risk.
A longer retirement, a more conservative portfolio or high fees all argue for a lower starting rate. Run 3% and 5% as well and compare how the depletion year moves before settling on a plan.