Test the 4% rule against your portfolio, retirement horizon, and monthly income needs. See your safe withdrawal rate, annual and monthly income, and historical survival probability across 4 strategies.
A safe withdrawal rate (SWR) is the percentage of your retirement portfolio you can withdraw each year without running out of money. The widely cited 4% rule, based on the Trinity Study, suggests withdrawing 4% of your portfolio in year 1 (then adjusting for inflation) makes a 60/40 stock/bond portfolio last 30+ years in over 90% of historical scenarios.
The 4% rule was designed for 30-year retirements with a 60/40 portfolio. For longer retirements (40-50 years, common in FIRE planning), many researchers recommend 3.5% or lower. Current low bond yields and high equity valuations have led some experts to suggest 3.3% as a safer starting point for 2026 retirees. Your SWR depends on your asset allocation, retirement length, and risk tolerance.
SWR = Annual withdrawal / Portfolio value. For example, if you have $1,000,000 and need $40,000/year, your SWR is 4%. The 25x rule (100/4) and the 4% rule are two sides of the same coin: multiply your annual need by 25 to get your target portfolio, or divide your portfolio by 25 to get your safe annual withdrawal.
For early retirees with 40-60 year horizons, a withdrawal rate of 3-3.5% is considered safer. The longer your retirement, the more market sequence risk matters — a bad market early in retirement (sequence of returns risk) can deplete your portfolio faster. Many FIRE planners use 3.3% as their baseline for 50+ year retirements.
Gross withdrawal rate is your total annual withdrawal divided by your portfolio. Net withdrawal rate accounts for taxes and fees — the amount you actually spend after paying investment fees, capital gains tax, and income tax. A 4% gross withdrawal might be 3.2% net after 0.3% in fund fees and 15-25% in taxes.