The 4% Rule Calculator

Corpus = annual expenses ÷ 4% (= 25× expenses). Or: annual withdrawal = corpus × 4%. Each year the withdrawal rises with inflation while the balance grows at your return.

The rule in one line

The 4% rule says you can withdraw 4% of your starting portfolio in the first year of retirement, then raise that dollar amount with inflation each year, and your money should last about 30 years. Flip it around and it gives you a target: if 4% covers a year’s spending, you need 25 times your annual expenses (because 1 ÷ 4% = 25). It came from the Bengen and Trinity-study research on historical US market returns.

Worked example — $40,000 a year of expenses at 4%: Corpus needed = $40,000 × 25 = $1,000,000, a $3,333-a-month withdrawal in year one. A cautious 3% would call for $1,333,000 (33×); 3.5% needs $1,143,000 (≈ 29×).

Both directions, and the safer rates

Use it whichever way you’re thinking. “The corpus I need” turns a spending figure into a savings target; “what I can withdraw” turns a pot you already have into a yearly income. Either way the calculator also shows the 3% and 3.5% versions — lower rates mean a bigger target (or a smaller withdrawal), and for long or early retirements they’re the more sensible choice. The withdrawal path and chart show the inflation-rising draws against the growing balance.

Where the rule came from — and its limits

The Trinity study tested fixed, inflation-adjusted withdrawals against historical 30-year windows of US stocks and bonds. 4% survived almost all of them — but those windows included strong long-run returns, which is why the longevity check here assumes about 7%. Two cautions: it ignores sequence-of-returns risk (a crash early in retirement is far more dangerous than the average suggests), and 30 years may be too short for someone retiring in their 40s. Treat 4% as a well-tested rule of thumb, not a promise — and lean lower for a long horizon.