4% Rule Retirement Calculator
Find out how large your portfolio needs to be to retire safely using the 4% Rule.
What is the 4% Rule?
The 4% Rule is a widely cited retirement planning guideline stating that you can withdraw 4% of your investment portfolio in your first year of retirement, then adjust that dollar amount for inflation each year after, with a low historical probability of running out of money over a roughly 30-year retirement. It originated from research commonly known as the Trinity Study, which analyzed historical US stock and bond market returns across many rolling time periods.
How does the 4% Rule translate into a savings goal?
Because 4% is the withdrawal rate, the math flips around into a simple multiplier: your required portfolio equals your desired annual spending divided by 0.04, which is the same as multiplying your annual spending by 25. This "25x annual expenses" shortcut is one of the most repeated rules of thumb in the FIRE (Financial Independence, Retire Early) community for estimating a retirement number.
Should I always use exactly 4%?
Not necessarily — some planners prefer a more conservative withdrawal rate like 3% or 3.5% (a 33x or roughly 28.5x multiplier) to account for longer retirements, sequence-of-returns risk, or a desire for extra safety margin, especially for early retirees with a 40+ year time horizon rather than the traditional 30 years the original research modeled. Others use a slightly higher rate if they have flexible spending or other income sources. Adjust the withdrawal rate field above to see how it changes your required portfolio.
Frequently Asked Questions
What is the 4% Rule in simple terms?
It's a retirement guideline suggesting you can withdraw 4% of your portfolio in year one of retirement, then increase that dollar amount each year with inflation, and historically have had a good chance of not running out of money over about 30 years.
Where does the 4% Rule come from?
It's based on research often called the Trinity Study, along with earlier work by financial advisor William Bengen, which examined historical US stock and bond returns across many overlapping 30-year periods to find a withdrawal rate that rarely depleted a portfolio.
Why is the multiplier 25x my annual spending?
Because 1 divided by 4% (0.04) equals 25. If your safe withdrawal rate is 4%, your portfolio needs to be 25 times your annual spending so that 4% of it equals your yearly spending need.
Is the 4% Rule guaranteed to work?
No — it's based on historical market data and carries no guarantee for the future. Poor market returns early in retirement (sequence-of-returns risk), unusually long retirements, or major unplanned expenses can all affect whether a given withdrawal rate holds up.
Should early retirees use a lower withdrawal rate than 4%?
Many people planning a retirement much longer than 30 years — common in the FIRE community — choose a more conservative rate like 3% to 3.5% for extra safety margin, which requires a larger portfolio (roughly 28.5x to 33x annual spending).
Does the 4% Rule account for inflation?
Yes — the original rule assumes you withdraw 4% in year one, then adjust that dollar amount upward each subsequent year to keep pace with inflation, maintaining the same real (inflation-adjusted) purchasing power throughout retirement.
Does this include Social Security or other income?
No — this calculator assumes your entire "Desired Annual Retirement Spending" comes from your investment portfolio. If you expect Social Security, a pension, or other income, subtract that from your spending need before entering it here.
How does this relate to Coast FIRE and Barista FIRE?
Coast FIRE and Barista FIRE both use the 4% Rule's portfolio target as their reference point for "full FIRE," then calculate variations — Coast FIRE asks how much you need today to grow into that number, and Barista FIRE asks how much part-time income fills the gap if you're not fully there yet.