The "4% rule" comes from research suggesting a retiree withdrawing 4% of their portfolio in year one, then adjusting that dollar amount for inflation every year after, has historically had a high probability of not running out of money over a 30-year retirement. It is a starting guideline, not a guarantee — actual safe rates depend on market returns during your specific retirement years.
Withdrawal rate
Relative risk level
Typical use case
3.0%-3.5%
Very conservative
Long retirements (40+ years), FIRE retirees
4.0%
Standard guideline
Traditional 30-year retirement
4.5%-5.0%
More aggressive
Shorter retirements, flexible spending
5.5%+
High risk
Only with substantial other income sources
Why sequence of returns risk matters
A portfolio that experiences poor returns in the first few years of retirement, even if average returns over the full period are fine, can deplete much faster than the math suggests, because withdrawals during a down market lock in losses. This is why many retirees keep 1-2 years of expenses in cash to avoid selling investments during a downturn.
This is a simplified model
Real retirement income planning involves Social Security timing, required minimum distributions, tax-bracket management across account types, and variable spending needs. Use this as a starting estimate, not a complete retirement plan.
A guideline suggesting a retiree can withdraw 4% of their portfolio in year one of retirement, then adjust that dollar amount for inflation each subsequent year, with a historically high probability of the portfolio lasting 30 years. It is a starting point, not a guarantee.
Is 4% still a safe withdrawal rate in 2026?
Opinions differ. Some planners suggest a lower starting rate, around 3% to 3.5%, for retirements much longer than 30 years, while others consider 4% reasonable for a standard 30-year retirement. The right rate depends on your portfolio, retirement length and risk tolerance.
What happens if I withdraw more than the safe rate?
A higher withdrawal rate increases the probability of depleting your portfolio before the end of your retirement, particularly if poor market returns occur early in retirement. The higher the rate, the shorter the portfolio is likely to last.
Should I adjust my withdrawal rate every year?
Some retirees use a fixed-dollar approach (adjusted only for inflation); others use a flexible approach that reduces withdrawals in down market years and increases them in strong years, which can extend portfolio longevity compared to a rigid fixed withdrawal.
Does this calculator account for Social Security?
No, this tool models portfolio withdrawals in isolation. In practice, Social Security and any pension income reduce how much you need to withdraw from your portfolio, which can support a higher sustainable withdrawal rate from savings alone.