Is the 4% rule still valid in 2026?

The 4% rule remains a reasonable starting point for 30-year retirements with a balanced stock/bond portfolio, though updated research suggests 3.7% for 90% success probability. For early retirees with 40-50 year horizons, 3.3% to 3.5% is more appropriate. The rule assumes a diversified portfolio of stocks and bonds, not a cash or bond-only portfolio. Spending flexibility (the ability to reduce withdrawals in down years) significantly improves outcomes at any withdrawal rate.

What return and inflation assumptions should I use?

Conservative but historically grounded assumptions: 5% to 7% for a balanced stock/bond portfolio gross return. 2.5% to 3.5% for long-term inflation. For conservative planning, use the lower return and higher inflation combination. Vanguard's 2026 10-year forward return projections suggest 4.2% to 6.2% for a 60/40 portfolio -- somewhat below historical averages given current valuations.

Should I include Social Security in my safe withdrawal calculation?

For accuracy, subtract guaranteed income (Social Security, pension) from your annual spending need before applying the withdrawal rate. If you need $60,000/year and receive $22,000 in Social Security, your portfolio needs to cover only $38,000. At 4%, that requires $950,000 -- not $1,500,000. Delaying Social Security to age 70 increases benefits by up to 32% and meaningfully reduces required portfolio withdrawals.

Investment & Wealth

Safe Withdrawal Rate Calculator

Model retirement withdrawals using the 4% rule with inflation adjustments to see if your portfolio survives.

Retirement Portfolio

Portfolio Value ($)

Withdrawal Rate (%)

Inflation Rate (%)

Expected Return (%)

Retirement Length (Years)

The 4% rule suggests withdrawing 4% in year one, then adjusting for inflation each year.

Withdrawal Plan

Enter your portfolio details and click calculate.

Embed This Calculator on Your Website

Add this free calculator to your blog, website, or CMS with a simple copy-paste embed code.

Introduction

The 4% rule emerged from the Trinity Study (Cooley, Hubbard, and Walz, 1998) and has since been updated and refined by researchers at Morningstar, Vanguard, and the Financial Planning Association. The original finding: withdrawing 4% of a portfolio in the first year of retirement, then adjusting that dollar amount for inflation annually, had a high probability of sustaining a 30-year retirement in historical market scenarios. But the operative phrase is "historical scenarios." At current market valuations and with lower expected bond returns, the 2024 Morningstar retirement research updated the safe withdrawal rate to 3.7% for retirees targeting 90% success probability over 30 years. For early retirees planning 40 to 50 years, the appropriate rate is closer to 3.3%. This calculator projects your portfolio value year by year under your chosen withdrawal rate, inflation assumption, and expected return -- showing exactly when (or whether) the money runs out.

What This Calculator Does

This safe withdrawal rate calculator models retirement portfolio withdrawals over a chosen time horizon. Enter your starting portfolio value, initial withdrawal rate, expected annual investment return, and expected annual inflation. The calculator projects year-by-year portfolio balance, withdrawal amounts (inflation-adjusted each year), total withdrawals, and remaining balance at the end of the period. It shows whether the portfolio survives the full retirement horizon and, if not, the year it depletes.

The Formula

Year 1 Withdrawal = Portfolio x Withdrawal Rate | Each Year: Withdrawal Amount x (1 + Inflation Rate) | Year-End Balance = (Prior Balance - Withdrawal) x (1 + Return Rate)

In year one, the withdrawal amount is set by multiplying the portfolio value by the chosen rate (e.g., 4%). In each subsequent year, the dollar amount of the withdrawal grows by the inflation rate to maintain purchasing power. The remaining portfolio earns the annual investment return on its balance before the year's withdrawal. This formula is the mathematical engine of the Trinity Study and subsequent retirement research. Sequence of returns risk -- the danger of a major market decline in the early years of retirement -- is not captured in this constant-return model but is addressed in the comparisonTable and mistakes sections.

Step-by-Step Example

Enter starting retirement parameters

Portfolio at retirement: $1,200,000. Initial withdrawal rate: 4.0%. Year 1 withdrawal: $1,200,000 x 4.0% = $48,000. Annual inflation: 3.0%. Expected portfolio return: 6.5%.

Project year 1 balance

Year 1: Start with $1,200,000. Withdraw $48,000. Remaining: $1,152,000. Apply 6.5% return: $1,152,000 x 1.065 = $1,226,880. Year-end balance: $1,226,880.

Year 2 withdrawal (inflation-adjusted)

Year 2 withdrawal: $48,000 x 1.03 = $49,440. Balance: $1,226,880 - $49,440 = $1,177,440. Apply return: $1,177,440 x 1.065 = $1,253,973. Balance grows in early retirement when returns exceed inflation-adjusted withdrawals.

30-year projection summary

At 4.0% withdrawal, 6.5% return, 3.0% inflation: portfolio survives 30 years with significant remaining balance. At 5.0% withdrawal, same assumptions: portfolio depletes around year 27. The withdrawal rate difference of 1.0% is the margin between success and shortfall.

Real-World Use Cases

Traditional Retirement at 65

A couple retires with $1,500,000, needs $60,000 in year 1 (4.0% rate). They plan for 30 years to age 95. At 6% return and 3% inflation: the portfolio projects to approximately $1,100,000 at year 30, fully funded. If return drops to 5% due to a bond-heavy allocation, the 30-year balance drops to $620,000 -- still solvent but with less margin.

Early Retirement at 50 (40-Year Horizon)

A FIRE practitioner retires at 50 with $1,000,000 and annual needs of $38,000 (3.8% initial rate). At 7% return and 2.8% inflation over 40 years: the portfolio projects to approximately $1,800,000 at age 90, leaving a substantial estate. Pushing to 4.5% would deplete the portfolio around year 37 -- highlighting why early retirees use lower withdrawal rates.

Portfolio Stress Testing

An investor uses this calculator to model a worst-case scenario: 3% portfolio return (bear market conditions) and 4% inflation. At a 4.5% withdrawal rate, the portfolio depletes in approximately 20 years -- below a standard 30-year retirement horizon. This reveals the need for either a lower withdrawal rate, additional income (Social Security, part-time work), or a higher starting balance.

Comparison

Withdrawal Rate	Required Portfolio (for $40K/year)	30-Year Success Rate*	40-Year Success Rate*	Notes
3.0%	$1,333,333	~99%	~95%	Ultra-conservative; large estate likely
3.5%	$1,142,857	~97%	~90%	Morningstar 2024 recommendation for 40+ years
3.7%	$1,081,081	~95%	~85%	Morningstar 2024 for 30-year retirement
4.0%	$1,000,000	~90% to 95%	~75% to 80%	Classic Trinity Study rate
4.5%	$888,889	~80% to 85%	~60% to 65%	Elevated risk for standard retirements
5.0%	$800,000	~65% to 70%	~45% to 55%	High risk; requires spending flexibility

Common Mistakes to Avoid

Using constant return assumptions without accounting for sequence of returns risk. A 6% average annual return is the same whether you earn 12% then 0% or 0% then 12% -- but it is not the same for retirees. Losing 30% in year 1 of retirement permanently impairs the portfolio even if returns average 6% afterward. The sequence matters enormously early in retirement.
Ignoring Social Security and other income sources. Many retirees expect dividends, Social Security, pension income, or part-time earnings to cover some expenses. These income sources reduce the required portfolio withdrawal, effectively lowering your withdrawal rate and dramatically improving portfolio longevity.
Applying a 30-year withdrawal model to an early retirement. A 50-year-old needs to plan for 40 to 50 years, not 30. The 4% rule was designed for 30-year retirements. Early retirees should use 3.3% to 3.5% unless they have significant spending flexibility or alternative income sources.
Not adjusting the withdrawal rate during market downturns. A flexible spending rule -- reducing withdrawals by 10% to 15% in years when the portfolio declines significantly -- dramatically improves long-term success rates compared to rigid inflation-adjusted fixed withdrawals regardless of market performance.

Frequently Asked Questions

Accuracy and Disclaimer

Safe withdrawal rate projections use simplified assumptions of constant annual returns and constant inflation rates. Actual retirement outcomes depend on sequence of returns, variable inflation, healthcare costs, tax law changes, spending flexibility, additional income sources, and longevity. Historical success rates are based on past US market data and do not guarantee future results. This calculator is for educational and planning purposes only and does not constitute financial advice. Consult a certified financial planner for personalized retirement income planning.

Conclusion

Withdrawal rate planning is not a one-time calculation -- it requires adjustment as market conditions, spending, and life expectancy evolve. A higher-than-expected return in early retirement may justify a temporary spending increase; a poor sequence of returns in years one through five demands immediate spending reduction. After running your withdrawal projections, use the FIRE Number Calculator to verify your target portfolio size, and the Net Worth Tracker Calculator to track how close your current savings are to your retirement target.