How to use it
- Enter Portfolio value.
- Enter Withdrawal rate %.
The formula
Annual income = portfolio × withdrawal rate.
Worked example
About this calculator
The 4% rule answers the retirement question in reverse: instead of asking how much income a pot gives, it defines the pot you need as 25× your annual spending. Withdraw 4% in year one, adjust for inflation each year after, and historically a balanced portfolio survived at least 30 years in almost every start year studied.
Treat it as a compass, not a contract. Sequence-of-returns risk — bad markets in the first retirement years — is what breaks the rule, so many retirees pair it with a cash buffer or flexible spending. Test different rates here to see how sensitive your income is.
Frequently asked questions
Where does 4% come from?
From historical studies (the 'Trinity study') of US portfolios surviving 30-year retirements.
Is 4% guaranteed to be safe?
No — it's a planning benchmark. Poor early returns, long retirements or high fees can require a lower rate.
Can I use a different rate?
Yes — change the rate field. Many planners today model 3–3.5% for early retirees.
Tips
- Start early; a decade of compounding is hard to replace.
- Always capture any employer match in full.
- Revisit your plan yearly as income changes.
Key terms
- Nest egg
- Total retirement savings.
- Drawdown
- Withdrawing from a pot over time.
- Match
- Employer contributions to your plan.