The 4% rule says you can take 4% of your savings in the first year of retirement, raise that amount with inflation every year after, and expect the money to last 30 years. With 1 million, that is 40,000 in the first year.
It is a good rule of thumb. But "expect it to last" hides a lot: how long you need it to last, what markets do, and how you invest all change the answer. This calculator runs those combinations through Retirement Lab's engine, 10,000 simulated futures each.
Try it
4% rule calculator
Pick a withdrawal rate and see how often it lasts. You take the same amount every year, raised with inflation, with no pension.
How many years it has to last
Market outlook
Share in stocks
Balanced: stocks 8%, bonds 4.5%, inflation 2% a year. The rest of the portfolio is in bonds.
Lasts 30 years
84%
of 10,000 simulated futures
First-year withdrawal
40,000
about 2,667 a month to spend after 20% tax
Highest rate that reaches
90%: 3.50%
95%: 3.00%
Free, no account needed. Opens a 30-year plan with this spending. The simulator starts at the Balanced outlook and 60% stocks - change them under Settings and Portfolio.
Retirement Lab engine, 10,000 simulated futures per setting, retiring at 60 with a plan to age 90. Withdrawals are before tax; the monthly figure assumes a 20% tax. Outlook returns are before inflation. With no pension, the success rate is the same for any savings amount. Results, not advice.
What 4% looks like over 30 years
With 60% stocks and 40% bonds, at the Balanced market outlook (stocks 8%, bonds 4.5% a year, inflation 2%), the chance that the money lasts 30 years:
| Withdrawal rate | First year from 1 million | Lasts 30 years |
|---|---|---|
| 3% | 30,000 | 96% |
| 3.5% | 35,000 | 91% |
| 4% | 40,000 | 84% |
| 4.5% | 45,000 | 72% |
| 5% | 50,000 | 59% |
Each half point is worth roughly 5 to 13 points of success, and the steps get bigger as the rate rises. If you want about a 90% chance at this outlook, 3.5% is closer to the mark than 4%.
Where the 4% came from
William Bengen's 1994 study found that 4%, raised with inflation, survived every 30-year period in US history he tested with a 50/50 stock and bond mix. Retirement Lab's historical engine gets a similar answer: with a 50/50 mix, 4% lasted 30 years in 95.7% of US periods since 1928. The backtesting article explains why a simulation and a historical test can disagree.
The simulated figure above is lower because the Balanced outlook assumes stock returns below the US average since 1928. If the next 30 years look like the last hundred, 4% has a better record. If they don't, it has less margin than its reputation suggests. The 4% rule myths article goes further into where the rule breaks down.
Your time horizon changes everything
The rule was built for 30 years. Retire at 55, or plan to 95, and you need it to last longer. At 4%, 60/40, Balanced outlook:
| Years it has to last | Lasts |
|---|---|
| 20 | 97% |
| 25 | 91% |
| 30 | 84% |
| 35 | 75% |
| 40 | 68% |
For a 40-year retirement, 3% gave about a 90% chance in the same setup. Early retirees should treat 4% as an upper limit, not a target.
The market outlook matters more than the stock mix
Same 4%, same 30 years, three outlooks and three stock shares:
| Stocks / bonds | Cautious | Balanced | Historical |
|---|---|---|---|
| 40 / 60 | 56% | 84% | 87% |
| 60 / 40 | 60% | 84% | 90% |
| 80 / 20 | 60% | 81% | 90% |
Moving between 40% and 80% stocks shifts the result by only a few points over 30 years. Changing your belief about future returns moves it by 30. That is a reason to test a plan under a cautious outlook too, not just the one you hope for.
Taxes: the part the rule leaves out
The 4% is what comes out of your savings, before tax. If your withdrawals are taxed at 20%, 40,000 leaves 32,000 to spend, about 2,667 a month. When you open the plan in the simulator, you enter the spending you want after tax, and it works out the withdrawal for you.
When 4% is too cautious
The rule assumes you never adjust. Many people do: they spend less after a bad year and travel more after a good one. A flexible rule such as guardrails can often start a little higher than 4% because it reacts (a Pro strategy in the simulator). A pension or Social Security also lowers what you need from savings, which is the real question behind any withdrawal rate. To see how long a specific amount lasts with a pension, try how long will 1 million last?
Frequently Asked Questions
- Is the 4% rule still safe?
- It is a reasonable starting point, not a guarantee. In Retirement Lab's engine, withdrawing 4% of the starting balance, raised with inflation, from a 60/40 portfolio lasted 30 years in about 84% of 10,000 simulated futures at the Balanced outlook, 60% at the Cautious outlook and 90% at long-run US historical averages.
- How much can I withdraw from 1 million with the 4% rule?
- 40,000 in the first year, then the same amount raised with inflation each year. That is before tax: at a 20% tax rate it leaves about 32,000 a year, or 2,667 a month, to spend.
- What withdrawal rate is safe for 40 years?
- Lower than for 30. In the simulations here (60/40, Balanced outlook), 4% lasted 40 years in about 68% of futures, 3.5% in about 81% and 3% in about 90%.
- Does holding more stocks make 4% safer?
- Less than you might think. At the Balanced outlook over 30 years, 4% lasted in about 84% of futures with 40% stocks, 84% with 60% and 81% with 80%. More stocks help over longer retirements and when stock returns are high, but they also make bad sequences worse.
Test your withdrawal rate
An example plan is filled in - change anything, then open it in the free simulator.
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