The 4% Rule Explained: Is It Safe for Retirement?
The number one fear of retirees is outliving their money. How do you know how much you can spend from your portfolio without going broke at age 85? Enter the 4%
The 4% Rule Explained: Is It Safe for Retirement?
The number one fear of retirees is outliving their money. How do you know how much you can spend from your portfolio without going broke at age 85? Enter the 4% Rule.
The Pain of Uncertainty
Retiring without a withdrawal strategy is gambling. If you pull out too much during a market downturn (Sequence of Returns Risk), you deplete your principal permanently.
What is the 4% Rule?
Based on the famous "Trinity Study," this rule states that if you invest in a balanced portfolio, you can withdraw 4% of your starting balance in the first year of retirement, and then adjust for inflation every subsequent year.
Historically, this has a 95%+ success rate for 30 years.
Is It Still Valid in 2026?
Some experts argue that with lower bond yields, a 3.5% withdrawal rate is safer. Others argue that if you have a flexible spending plan, you can withdraw more.
The Easy Way: Calculate Your Number
Do you have enough to retire today? Or do you need to work another 5 years? Our calculator runs the simulation for you.
Frequently Asked Questions
Does this include Social Security?The 4% rule applies only to your investment portfolio. Social Security is extra income on top of your withdrawals.