The 4% rule

The 4% rule is a rule of thumb for how much you can safely withdraw from an investment portfolio each year without running out of money. If you withdraw 4% of your portfolio in year one, then adjust that amount for inflation every year after, history suggests the money should last 30 years or more in most market conditions. Flip it around and it gives you a quick way to estimate your FIRE number: multiply your annual spending by 25 (that's 1 ÷ 0.04).

Where it comes from

The 4% figure comes from research — most famously the "Trinity Study" — that tested withdrawal rates against decades of historical stock and bond returns, looking for a rate that survived even the worst starting points, like retiring right before a market crash. 4% held up in the vast majority of scenarios over 30-year periods.

It's a starting point, not a law of physics. Retiring earlier than normal means a longer time horizon for your portfolio to survive, so some people choose a more conservative rate. Our calculators default to 4% but let you adjust the withdrawal rate to suit your own comfort with risk.