Interactive financial calculator
4% Rule Calculator
The 4% rule suggests withdrawing 4% of your portfolio in year one of retirement, then adjusting for inflation annually.
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Methodology & Assumptions
How this estimate is calculated
Year-one withdrawal equals portfolio value × withdrawal rate. Later displayed withdrawal amounts rise with the entered inflation rate. The model is based on historical withdrawal-rate research and does not simulate portfolio survival or market sequences.
Illustrative result: figures are rounded for display after calculations use full numeric precision. Actual results may differ.
Currency: dollar symbols are a display convention. Enter every monetary amount in one consistent currency; the calculator does not convert currencies or apply jurisdiction-specific tax rules.
What Is the 4% Rule?
The 4% rule states that you can withdraw 4% of your starting portfolio in year one of retirement, then adjust that amount annually for inflation. It's based on historical U.S. market data examined for 30-year retirement periods — not a guarantee for any future retirement. It's the foundation of FIRE planning — and the source of the 25x formula for calculating your retirement number.
The rule was examined in historical United States data by finance professors Cooley, Hubbard, and Walz. Their results varied with asset allocation, withdrawal rate, and horizon. It is a historical rule of thumb, not a guarantee for a future retirement.
This calculator computes withdrawal amounts only: your year-one withdrawal and its inflation-adjusted value in a future year. It is not a live simulation and does not simulate market returns, sequence of returns, fees, taxes, asset allocation, or the probability that a portfolio survives a given retirement length.
Withdrawal Rate Comparison
| Rate | Multiplier | Portfolio for $50k/yr | Portfolio for $80k/yr |
|---|---|---|---|
| 5% | 20× | $1,000,000 | $1,600,000 |
| 4% | 25× | $1,250,000 | $2,000,000 |
| 3.5% | 28.6× | $1,429,000 | $2,286,000 |
| 3% | 33.3× | $1,667,000 | $2,667,000 |
Each portfolio figure is annual spending ÷ withdrawal rate, rounded to the nearest $1,000. This calculator does not map a rate to a retirement horizon or a probability of success — a longer planned retirement is one reason some people choose to test a lower rate, but no rate here is tied to a specific number of years.
How to Use This Calculator
Enter your portfolio size and adjust the withdrawal rate to match your timeline. The calculator shows your Year 1 annual and monthly income, plus the inflation-adjusted withdrawal amount at your chosen retirement duration — useful for understanding how much more you'll need to withdraw in nominal dollars decades from now.
Making the 4% Rule More Robust
Cash buffer strategy: Some retirees hold a cash reserve so they have another source for near-term spending during market declines. That can reduce forced sales but has opportunity costs and does not eliminate sequence risk.
Flexible spending: Temporarily reducing discretionary spending after poor market returns can lower withdrawals. The effect depends on the adjustment rules and circumstances.
Related: FIRE Number Calculator — use the same withdrawal rate to calculate your retirement target.
Frequently Asked Questions
Does the 4% rule work for early retirement (retiring at 40)?
A horizon longer than the 30-year periods often discussed with the rule introduces more uncertainty. Testing lower rates, variable spending, and adverse return sequences can show how sensitive a plan is; this calculator itself does not estimate success rates.
Should I include Social Security in the 4% rule calculation?
Only from the age you actually expect to claim it. Before that age, the portfolio must cover 100% of your expenses; use your personalized SSA benefit estimate and claiming-age plan rather than a national average. This calculator computes a single constant withdrawal rate and cannot combine a higher pre-claim spending need with a lower post-claim spending need into one figure. The most conservative estimate is to run it with Social Security excluded entirely, sizing your portfolio for full self-funded spending. This calculator computes a single constant rate and still cannot combine a bridge period and a later-starting benefit into one continuous projection on its own; for that, use the Retirement Withdrawal Calculator, whose optional recurring-income start age models the full pre-claim spending need and the reduced post-claim need in one continuous month-by-month projection. If you want to stay within this 4% rule calculator instead, work out the bridge-year total (your full $65,000/year need, times the years until you claim) and the reduced post-claim ongoing need ($47,000/year) separately.
What happens if my portfolio runs dry?
The Cooley, Hubbard, and Walz research cited above tested a 4% initial withdrawal rate against historical U.S. periods and 30-year horizons, and its outcomes varied by the stock/bond allocation and assumptions tested — the study does not report a single universal success or failure result for every asset mix, fee level, or future market environment, and this calculator does not simulate that risk directly. If a portfolio were to run low, options such as part-time work, spending cuts, and delayed Social Security claiming are ways to respond — not a guaranteed fix. Test lower withdrawal rates and flexible-spending scenarios directly instead of relying on a single historical percentage.
Do current market valuations change the 4% rule?
Valuations and expected returns can affect future outcomes, but they do not provide a certain withdrawal rate. Compare several rates and stress scenarios rather than treating a single historical rule as current-market advice.