Safe Withdrawal Rate Calculator (4% Rule)
Apply the 4% rule (or any other rate) to your portfolio and see how long your money lasts under different return assumptions.
Where the 4% rule comes from
In 1994, financial planner Bill Bengen looked at rolling 30-year periods of U.S. market history going back to 1926 and asked: what's the highest initial withdrawal rate that would have survived every single 30-year window, including the worst cases (retiring in 1929 or 1966)? The answer was roughly 4% — withdraw 4% of your initial portfolio in year one, adjust the dollar amount for inflation each year after, and you'd have run out of money in zero of the historical periods.
What the rule actually says
Contrary to how it's often summarized, the 4% rule is not "withdraw 4% of your remaining balance each year." It's: withdraw 4% of your initial balance in year one, then adjust that dollar amount for inflation each year after. So if you retire with $1,000,000 and inflation is 3%, you'd withdraw $40,000 in year one, $41,200 in year two, $42,436 in year three, and so on — regardless of what the portfolio does in the market.
Where the rule breaks
The 4% rule was based on U.S. historical data — a singular outlier in global equity returns. If future returns are lower than past ones (many economists think they will be), 3.5% may be more appropriate. The rule also assumes rigid behavior: no spending cuts in down markets, no adjustments for longer retirements. A dynamic withdrawal strategy (e.g., Guyton-Klinger "guardrails," or simply cutting spending in bad years) often outperforms the fixed 4% rule for both safety and total spending.
Also: 30 years. If you retire at 55 and might live to 95, you need 40 years of withdrawals, and 4% starts to look generous. If you retire at 70, 3.5%/25-year math is more forgiving than 4%/30.
How to use this calculator
Start with the defaults ($1M, 4%, 5% real, 30 years). That's the baseline case that inspired the whole rule. Then stress-test: drop the real return to 3% (what some researchers think the next 30 years look like). Raise the withdrawal rate to 5% or 6%. Shorten the horizon to 20 years or extend to 40. The model runs deterministically — it doesn't simulate sequence-of-returns risk, which is the single biggest threat to early retirees. A Monte Carlo simulation would tell a richer story; that's what an advisor's planning software does.