The 4% Rule Explained: Safe Retirement Withdrawals

How Much Can You Safely Withdraw in Retirement?

Based on the landmark **Trinity Study**, the 4% rule states that a retiree with a diversified portfolio of 50% to 75% stocks and bonds can withdraw **4% of their initial portfolio value** in Year 1, adjusted for inflation annually thereafter, with a 95%+ probability of not running out of money over a 30-year period.

How to Calculate Your Retirement Goal

To find your target nest egg using the 4% rule, simply multiply your desired annual retirement spending by **25**.

      💡 Example: If you need **$60,000/year** to cover living expenses in retirement:

      • Goal Nest Egg = $60,000 × 25 = **$1,500,000**.

Adjusting for Early Retirement (FIRE)

If you plan to retire early at age 35 or 40 (requiring a 40 to 50-year retirement timeline), many financial experts recommend a slightly more conservative withdrawal rate of **3.25% to 3.5%** (a 28x to 30x expense multiplier).

🔥 Calculate Your FIRE Target Number

Calculate your exact early retirement timeline and portfolio target with our free FIRE Calculator.

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