How to Use the 4% Rule Retirement Withdrawal Calculator
The 4% rule comes from the Trinity Study, a widely cited analysis showing that withdrawing 4% of your portfolio in year one of retirement, then adjusting that dollar amount for inflation each year after, kept most historical U.S. stock-and-bond portfolios from running dry over a 30-year retirement. This calculator takes your portfolio value and withdrawal rate to show your annual and monthly withdrawal amounts.
Choosing a lower rate (3-3.5%) improves the odds your money lasts even longer, at the cost of a smaller annual budget, while going above 4.5% gives you more spending power early on but raises the risk of running out of money later in retirement.
Keep in mind the 4% rule is a rule of thumb built on historical U.S. market returns, and real outcomes depend heavily on the market conditions at the time you retire, your asset allocation, and whether you have other income sources like Social Security. Treat this result as a planning estimate, and revisit your withdrawal rate as retirement approaches and your actual spending needs become clearer.
Frequently Asked Questions
It's a rule of thumb from the Trinity Study: withdrawing 4% of your portfolio in your first year of retirement, then increasing that dollar amount by inflation each year, kept most historical U.S. market-based portfolios from running out of money over a 30-year retirement.
No. The safe rate depends on market conditions at retirement, your asset allocation, and how long your retirement lasts (longer or shorter than 30 years) — it can reasonably range from about 3% to 4.5%. For a more conservative plan, try calculating at 3-3.5% instead.