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, with a high probability of your money lasting 30+ years. 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 | Best for |
|---|---|---|---|---|
| 5% | 20× | $1,000,000 | $1,600,000 | Short retirement, guaranteed income |
| 4% | 25× | $1,250,000 | $2,000,000 | 30-year retirement horizon |
| 3.5% | 28.6× | $1,429,000 | $2,286,000 | 35-45 year retirement |
| 3% | 33× | $1,650,000 | $2,640,000 | 50+ year early retirement |
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?
Yes — subtract expected SS income from annual expenses before calculating your portfolio target. If you need $65,000/year and expect $18,000/year from SS, only $47,000 needs to come from the portfolio: $47,000 × 25 = $1,175,000 vs. $1,625,000 without SS.
What happens if my portfolio runs dry?
In the small percentage of historical scenarios where a 4% rate failed over 30 years, portfolios ran out in the final 5-10 years — manageable with part-time work, spending cuts, or delayed Social Security claiming. It's a risk, not a certainty, and flexible spending strategies reduce the risk substantially.
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.