4% Rule Calculator
The 4% rule takes 4% of starting savings in year 1, then raises that dollar amount with inflation each year. With $1,000,000, that is $40,000 a year ($3,333 a month); at a constant 5% return before 0.3% fees and 2.5% inflation, it fully funds 37 years with no income or tax. Change this 4 percent rule calculator's inputs to compare duration and ending balance.
4% rule calculator
A 4% first-year rate on $1,000,000 sets spending at $40,000 a year ($3,333 a month).
Raised 2.5% a year for inflation, at a 4.7% net return it fully funds 37 years (through age 102), then first runs short in the year ending at age 103. At age 95 the balance is about $568,493 ($271,025 in today's dollars).
The rate is applied once to starting savings. These dollars become the spending target; optional income offsets it and optional tax increases the savings withdrawal. Today's dollars mean purchasing power when withdrawals start.
Compare first-year withdrawal rates
| Rate | First-year annual spending | Years fully funded | Balance at 95 |
|---|---|---|---|
| 3% | $30,000 | 60+ | $1,417,979 |
| 3.5% | $35,000 | 46 | $993,236 |
| 4% | $40,000 | 37 | $568,493 |
| 4.5% | $45,000 | 31 | $143,751 |
| 5% | $50,000 | 27 | $0 |
Balance by age
First three years, every fifth year and the final year appear below. Planned spending can exceed available funds after the first shortfall; the balance is floored at zero.
| Age at year end | Growth | Planned spending | Income | Tax needed | Balance |
|---|---|---|---|---|---|
| 66 | $47,000 | $40,000 | $0 | $0 | $1,007,000 |
| 67 | $47,329 | $41,000 | $0 | $0 | $1,013,329 |
| 68 | $47,626 | $42,025 | $0 | $0 | $1,018,930 |
| 70 | $48,116 | $44,153 | $0 | $0 | $1,027,708 |
| 75 | $48,582 | $49,955 | $0 | $0 | $1,032,287 |
| 80 | $47,597 | $56,519 | $0 | $0 | $1,003,786 |
| 85 | $44,581 | $63,946 | $0 | $0 | $929,163 |
| 90 | $38,775 | $72,349 | $0 | $0 | $791,418 |
| 95 | $29,194 | $81,856 | $0 | $0 | $568,493 |
Want a spending target instead? How much do I need to retire solves for savings from a budget. The retirement spending calculator solves for spending from savings.
Withdrawal rates by return and retirement length
Compare rates under the same assumptions. Higher returns support more payments in this smooth path; higher first-year spending uses savings sooner.
How many years a withdrawal rate lasts
| First-year rate | 3% return | 4% return | 5% return | 6% return | 7% return |
|---|---|---|---|---|---|
| 3% | 35 | 43 | 60+ | 60+ | 60+ |
| 3.5% | 30 | 36 | 46 | 60+ | 60+ |
| 4% | 26 | 30 | 37 | 52 | 60+ |
| 4.5% | 23 | 26 | 31 | 40 | 60+ |
| 5% | 20 | 23 | 27 | 33 | 45 |
| 6% | 17 | 19 | 21 | 24 | 29 |
To reproduce a cell, enter its withdrawal rate and return in the calculator and keep every other input at the caption's settings.
Highest constant-return withdrawal rate by retirement length
| Years funded | 3% return | 4% return | 5% return | 6% return | 7% return |
|---|---|---|---|---|---|
| 20 | 5.23% ($52,306) | 5.78% ($57,782) | 6.36% ($63,574) | 6.97% ($69,675) | 7.61% ($76,074) |
| 25 | 4.20% ($42,048) | 4.75% ($47,530) | 5.34% ($53,407) | 5.97% ($59,666) | 6.63% ($66,291) |
| 30 | 3.52% ($35,210) | 4.07% ($40,715) | 4.67% ($46,692) | 5.31% ($53,122) | 6.00% ($59,980) |
| 35 | 3.03% ($30,326) | 3.59% ($35,863) | 4.19% ($41,949) | 4.86% ($48,556) | 5.56% ($55,646) |
| 40 | 2.67% ($26,663) | 3.22% ($32,239) | 3.84% ($38,438) | 4.52% ($45,222) | 5.25% ($52,541) |
Both tables are constant-return arithmetic, not a backtest and not a probability of success. Bad early returns can exhaust savings sooner even when the long-run average looks adequate.
Calculated 2026-11-12 with the model described in /methodology (section 1d).
How this calculator works
First-year spending equals starting balance times withdrawal rate. That amount divided by 12 enters the shared drawdown model, with no income unless added and flat tax off by default. Spending rises with inflation from year 2; the rate is never reapplied to later balances.
This model withdraws at year end after that year's return. A start-of-year withdrawal would leave less money invested in years with positive returns, so timing conventions shift results slightly. Fees reduce the return every year. The balance at your plan age is nominal; its today's-dollar value divides by (1 + inflation) raised to the number of plan years.
Years lasted counts full years paid before the first shortfall. A separate 60-year run measures duration regardless of your selected plan age; 60+ means no shortfall in that window, not proof of perpetual income. Table 2 searches rates with 60 binary-search steps, retaining the highest passing rate within the supported 0–20% range. Rounding a displayed rate upward can create a shortfall when reentered.
Where the 4% rule comes from
William P. Bengen's Determining Withdrawal Rates Using Historical Data, Journal of Financial Planning, October 1994, tested US retirements starting from 1926 using historical stock and bond returns. Withdrawals began as a percentage of the initial portfolio, followed by inflation-adjusted dollars. In his 50% stock example, a 4% first-year withdrawal never exhausted a portfolio in under 33 years, while 4.25% could fail in about 28 years; he discussed portfolio mixes with 50–75% stocks. He called 3% “absolutely safe” historically, 5% “risky” and 6% or more “gambling” (Figure 1(B) and discussion, PDF p. 5; conclusion, p. 12).
Bengen's 4% is the worst case across every historical starting year he tested, so bad sequences are built in. The tables above use one constant return instead: for example, 4.07% is the highest 30-year rate at a steady 4% return before fees. That number is not a historical success rate, and neither result promises how your retirement will go.
4% rule vs other withdrawal approaches
The constant-dollar method targets stable purchasing power: your planned dollars follow inflation even after losses. Taking a fixed percentage of each year's balance instead lets dollars fall when the balance falls and rise when it grows. It changes the spending path rather than preserving this page's target. You can compare both methods in the retirement withdrawal calculator.
Guardrails and flexible spending adjust withdrawals at chosen limits, potentially requiring cuts, skipped inflation increases or later increases. Their usefulness depends on expenses you can change. This tool computes the constant-dollar method only.
The 25× rule mirrors 4% because 1 / 0.04 = 25. For a budget-based comparison, how much do I need to retire calculates 21.42 times annual spending for 30 years at a constant 5% return before 0.3% fees and 2.5% inflation, with no income, tax or legacy target. That computed multiple is not a safe-rate recommendation.
Social Security lowers what savings must cover by offsetting the spending target. Delayed benefits leave an earlier gap; surplus income goes into savings. Enter your after-tax estimate and start age; claiming adjustments are not calculated.
Limits of the 4% rule and this calculator
One constant return hides market swings and the order of gains and losses. The paper's stock and bond mix is not modeled: there is one return input, no asset allocation engine, historical backtest or Monte Carlo simulation. Review the fee assumption because costs reduce every year's growth.
Tax is a flat optional gross-up only, not a calculation of brackets, account types or required distributions. Early retirement needs a longer horizon: compare the 40-year row in table 2 with durations in table 1, then extend your plan age. Healthcare shocks, changing budgets and a separate inheritance target are not modeled here.
- The balance cannot go below zero. "Runs short" means that year's spending could not be fully paid, so the balance is zero at year end. Spending that is exactly covered counts as funded.
FAQ
How much can I withdraw with the 4% rule from $1 million?
Year 1 provides $40,000 a year, or about $3,333 a month. That is before optional tax. Later dollars rise with inflation, not with the balance.
Does the 4% rule adjust for inflation?
Yes. Apply the percentage once in year 1, then increase the dollars by inflation from year 2. This calculator uses one constant inflation assumption.
Is the 4% rule still safe?
Bengen’s historical study found that the inflation-adjusted approach lasted across the retirements he tested with the portfolio mixes he studied. That historical finding does not guarantee a future outcome. This tool tests one constant return, not market history or a probability of success, so it cannot certify a safe rate.
How long will savings last at 4%?
With $1,000,000, withdrawals starting at 65, a 5% return before 0.3% fees, 2.5% inflation, no income and no tax, this model fully funds 37 years through age 102. It first runs short in the year ending at age 103. Different assumptions change that result.
What is the 4% rule for early retirement?
It is the same first-year percentage followed by inflation-adjusted dollars, but an earlier retirement can require more years of payments. Compare the 40-year row in the retirement-length table, then enter your own start and plan ages. A rate that funds a shorter constant-return plan may fail over a longer one.
Does the 4% rule include Social Security?
The percentage describes a withdrawal from savings, separate from Social Security. Here the default income is zero. Added income offsets the spending target, reducing what savings cover. Enter after-tax income; it rises with inflation even before starting.
Related tools
Choose how much do I need to retire, solve a spending target with the retirement spending calculator. Check the shared formulas in methodology.