How much money do you actually need to retire comfortably? The 4% Rule is a simple, time‑tested guideline that gives you a clear target. Learn how it works and calculate your personal number.
The 4% Rule is a retirement withdrawal guideline developed from the Trinity Study. It states that if you withdraw 4% of your portfolio in your first year of retirement, and adjust that amount for inflation each year thereafter, your savings should last at least 30 years – even in tough markets.
In simple terms: Your target nest egg = Your annual retirement spending ÷ 0.04.
Based on the Trinity Study (1998), which analyzed historical market returns to find a safe withdrawal rate that would have survived various 30‑year periods.
With a portfolio of 60% stocks and 40% bonds, a 4% initial withdrawal rate had a high success rate historically. It’s a starting point, not a guarantee.
After year one, you increase your withdrawal by the previous year’s inflation rate to maintain purchasing power.
Future returns may differ; taxes, fees, and a longer retirement (e.g., early retirement) may require a more conservative rate like 3.5% or 3%.
Enter your desired annual spending in retirement (in today’s dollars) and adjust the withdrawal rate to see the nest egg you’ll need.
Adjust the values and click the button.
The 4% rule is a guideline. Your actual safe withdrawal rate depends on your portfolio, time horizon, and market conditions. For early retirement (30+ years), many experts suggest 3%–3.5%.