4% Rule Calculator
Calculate your safe retirement withdrawal rate using the 4% Rule. Determine how much you can withdraw annually from your retirement portfolio without running out of money.
Step 1: Retirement Portfolio
The 4% Rule Formula
Annual Withdrawal = Portfolio Value × Withdrawal Rate
Inflation-Adjusted = Previous Year’s Withdrawal × (1 + Inflation Rate)
Step 2: Timeline & Options
Safe Withdrawal Guidelines
4% Rule: 95% success rate for 30-year retirement
3.5% Rule: More conservative for early retirement
4.5% Rule: For portfolios with higher stock allocation
Always consult a financial advisor for personalized advice
4% Rule Calculation Results
Safe Annual Withdrawal Amount
30-Year Withdrawal Timeline
| Year | Annual Withdrawal | Monthly Equivalent | Cumulative Total |
|---|
The 4% Rule Formula
Annual Withdrawal = Portfolio Value × Withdrawal Rate
Where:
• Portfolio Value = Total retirement savings
• Withdrawal Rate = Percentage withdrawn annually (typically 4%)
• Inflation Adjustment = Previous year’s withdrawal × (1 + inflation rate)
Key Assumptions:
• 30-year retirement period
• 50-75% stock allocation
• Historical market returns
• 2-3% average inflation
Example Calculations
Example 1: $1,000,000 Portfolio at 4%
Portfolio: $1,000,000
Withdrawal Rate: 4%
First Year: $40,000 annually ($3,333 monthly)
Year 30 (with 3% inflation): $97,091 annually ($8,091 monthly)
Total Withdrawn over 30 years: $1,940,906
Example 2: $500,000 Portfolio at 3.5%
Portfolio: $500,000
Withdrawal Rate: 3.5%
First Year: $17,500 annually ($1,458 monthly)
More conservative approach for smaller portfolios or early retirement
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