Safe Withdrawal Rate Calculator
Compute sustainable annual spending from your portfolio using 3.0%/3.5%/4.0%/4.5% withdrawal rates. Based on Bengen 1994 and the Trinity Study. Free.
Safe Withdrawal Rate Calculator
Compares four first-year withdrawal rates (3.0% / 3.5% / 4.0% / 4.5%). The rate applies once: year one takes that share of the portfolio, and every later year takes the same dollar amount raised by inflation. The 4% figure comes from US data over retirements of at most 30 years — Bengen (1994) on a 50/50 stock/Treasury baseline, and the Trinity study (1998) across five stock/bond mixes — before taxes and fees. Lower rates bought longer horizons in that history.
FIRE number — portfolio needed to support your target spending
How to Use the SWR Calculator
Enter your portfolio value
Sum of all investments earmarked for retirement spending — 401(k), IRA, taxable brokerage, Roth. Don't include home equity (unless you plan to downsize and harvest equity) or college funds.
Enter your target annual spending
What the portfolio itself has to pay for each year, before tax on the withdrawal: housing, healthcare, insurance, the tax bill and everything else, less any Social Security, pension or rental income. Neither study modelled taxes or fees, so a figure that leaves them out flatters the result.
Read across the four rates
4% is the classic 30-year finding: in Trinity's inflation-adjusted table it succeeded in 95% of 30-year periods at 50/50 stocks and bonds, 98% at 75/25. Bengen called 3% "absolutely safe (to the extent history is a guide)" because no portfolio lasted under 50 years, and said the same held up to about 3.5%. Each card says which source its rate comes from.
Check the FIRE number
The portfolio that spending implies at each rate: spending ÷ rate. For USD 60K a year: USD 1.5M at 4%, about USD 1.71M at 3.5%, USD 2M at 3%. The verdict bar measures your portfolio against the 4% number.
The 4% Rule and Why It Still Anchors Retirement Planning
Where the 4% Rule Came From
In October 1994, financial planner William Bengen published "Determining Withdrawal Rates Using Historical Data" in the Journal of Financial Planning. Using Ibbotson's US return and inflation data, he simulated a retiree starting in every year from 1926 to 1976 on a 50% stock / 50% intermediate-Treasury portfolio and asked what first-year rate, raised with inflation afterwards, lasted at least 30 years. At 4% no portfolio ran out in under 33 years; at 4.25% one could run out in 28. He advised holding between 50% and 75% in stocks, and the worst start years were 1966 and 1969. In February 1998 three Trinity University finance professors — Cooley, Hubbard and Walz — published success rates for 3% to 12% withdrawals over 15 to 30 years, for five mixes of the S&P 500 and long-term corporate bonds, on 1926–1995 data. That grid made 4% famous.
The mechanics are specific: withdraw exactly 4% of the starting portfolio in year 1 (so USD 60K from a USD 1.5M portfolio), then in each subsequent year increase the prior year's dollar withdrawal by CPI inflation — NOT by 4% of current portfolio. This means your withdrawal stays roughly constant in real terms regardless of market performance. The 4% rule is about preserving purchasing power, not about a fixed percentage every year. In Trinity's inflation-adjusted table the 4% / 30-year cell reads 95% with 100% stocks, 98% at 75/25, 95% at 50/50, 71% at 25/75 and 20% in bonds alone; a period counted as a success if any money was left at the end. Neither paper adjusted for taxes or fees.
Why Modern Planners Often Use 3.5% Instead
The 4% figure is US-specific and horizon-specific. Wade Pfau, testing 17 developed markets on 1900–2008 data, found the historical worst-case rate above 4% in only four — Canada, Sweden, Denmark and the United States — and over 30-year retirements the 4% rule failed in 62.5% of Italian and 42.5% of French cases. Trinity's own conclusion was that "early retirees who anticipate long payout periods should plan on lower withdrawal rates." Morningstar's 2025 forward-looking simulation (90% success, before fees) put the starting rate at 3.9% for 30 years and 3.3% for 40. The trade-off is direct: a lower rate means a bigger required portfolio and more room for bad decades.
Flexible spending raises the starting rate. In the guardrails method of Jonathan Guyton and William Klinger, as Morningstar's 2025 report describes it, the retiree cuts the year's withdrawal by 10% when it has risen to more than 20% above the starting percentage of the portfolio, and adds 10% when it has fallen more than 20% below. In Morningstar's simulation that system supported a 5.2% start on a 40/60 portfolio over 30 years, against 3.9% for fixed real withdrawals — paid for with spending that moves. This calculator models fixed real withdrawals only.
"FIRE math: target retirement income × 25 = portfolio needed at the 4% rule. Need USD 60K/year? Need USD 1.5M. Need USD 100K/year? Need USD 2.5M. The 25× multiplier is the FIRE community's most-quoted heuristic and the inverse of 4%."
Sequence-of-Returns Risk — The Underlying Worry
The 4% rate's tightest historical squeeze came from retiring just before a prolonged bear market combined with high inflation — Bengen's worst start dates were 1966 and 1969, and in his 2020 update the worst case was a retirement starting on 1 October 1968. The problem is "sequence-of-returns risk": withdrawing during a downturn sells shares at low prices, leaving fewer to benefit from the recovery. Two retirees with identical average returns can end up far apart if one meets the bad years first. Bengen's own advice was not to raise the rate after a few good early years. The levers that change the arithmetic are spending less after a bad year, other income in the early years, and a lower starting rate.
Bengen's 1994 paper, and what a 1966 retirement did to it
The "4% rule" originated in William Bengen's October 1994 paper, though the phrase itself does not appear in it. The Trinity study (1998) popularised the figure.
The rule is: withdraw 4% of starting portfolio year 1, then inflation-adjust the dollar amount each subsequent year.
Built on US data only: Bengen simulated retirements starting 1926–1976 and advised 50-75% stocks; Trinity used 41 overlapping 30-year periods from 1926–1995.
Trinity, 30 years, inflation-adjusted: 3% succeeded in 100% of periods for every mix from 100% stocks to 25/75; 4% in 95-98% at 50-100% stocks; 5% in 76-85%. Trinity did not test 3.5%.
The FIRE 25× rule: portfolio needed = annual spending × 25 (inverse of 4%).
For a 40-year horizon, Morningstar's 2025 base case is 3.3%; its 30-year figure is 3.9%. Both are before fees and taxes.
Sequence-of-returns risk: Bengen's worst starts were 1966 and 1969, retirees who met the 1973-74 bear market and high inflation early.
Guardrails (Guyton and Klinger): cut 10% when the withdrawal rate drifts 20% above its start, raise 10% when it drifts 20% below. Morningstar found a 5.2% start that way.
The 4% rule does NOT include Social Security, pensions, or rental income — only the portfolio withdrawal.
Outside the US the record is weaker: across 17 developed markets 1900-2008, the worst-case rate beat 4% in only four (Pfau 2011).
Frequently Asked Questions
- As a 30-year, US-historical finding: the studies stand as published (Trinity's inflation-adjusted 4%/30-year cells sit at 95-98% for stock-heavy mixes). Whether it fits today is debated — Morningstar's 2025 research puts a fee-free base case at 3.9%, while Bengen himself has argued higher. Longer horizons argue for more conservatism; Bengen's 50-year "absolutely safe" band was 3-3.5%. Treat 4% as a reference point, not a plan — and read our 4% rule guide for where every number comes from.
- The portfolio size needed to support your target spending at your chosen withdrawal rate. The 25× rule is the inverse of 4%: portfolio = annual spending × 25. Want USD 60K/year? Need USD 1.5M. Want USD 100K/year? Need USD 2.5M. At lower withdrawal rates the multiple rises: 28.6× at 3.5%, 33.3× at 3%.
- The 4% rule applies to PORTFOLIO withdrawals only — Social Security, pensions, rental income, and annuity payments are separate sustainable income streams. To use the tool: enter your target spending NET of Social Security. If you spend USD 80K/year and expect USD 30K from SS, you need the portfolio to support USD 50K — which requires USD 1.25M at 4%. At 4%, every USD 10K a year of other income cuts the required portfolio by USD 250K.
- The 4% is the GROSS withdrawal from the portfolio. Taxes come out of that amount. For tax-deferred accounts (Traditional 401(k)/IRA), withdrawals are taxed as ordinary income. Qualified Roth withdrawals are tax-free. In a taxable brokerage account only the gain is taxed, and long-term gains are taxed at 0%, 15% or 20% federally depending on taxable income (IRS Topic 409). Bengen assumed tax-deferred accounts and Trinity made no tax adjustment, so plan your spending net of tax and work back to the gross withdrawal.
- This is "sequence-of-returns risk" — the single biggest threat to portfolio survival. The levers: (1) spend less after a bad year — the guardrails method cuts the withdrawal 10% once it is more than 20% above its starting rate; (2) other income in the first years, so less has to be sold low; (3) a lower starting rate. In Bengen's US data a 4% start survived the worst historical sequences for at least 33 years, but that is one country's history, not a promise.
- Historically, mostly not. Wade Pfau tested 17 developed markets on 1900–2008 data: the worst-case rate exceeded 4% in only four (Canada, Sweden, Denmark and the US), and over 30 years the 4% rule failed in 62.5% of Italian and 42.5% of French cases. He described the US as having "a rather remarkable run". A retiree living on one non-US market should test lower rates, and remember that currency and local inflation are risks the US studies never had to model.
- Flexible systems do. In the guardrails method as Morningstar describes it, when strong returns push the withdrawal more than 20% below its starting share of the portfolio, the retiree adds 10% to that year's withdrawal; the matching cut applies after losses. Bengen's fixed 4% never raises spending beyond inflation, which is why it leaves large balances in most historical periods — Trinity's terminal-value table shows the same.
- Different lifestyle assumptions, same math. Lean FIRE: USD 25-40K/year spending → USD 625K-USD 1M portfolio. Standard FIRE: USD 50-80K → USD 1.25M-USD 2M. Fat FIRE: USD 100-200K+/year → USD 2.5M-USD 5M+. Coast FIRE: enough invested early that compounding alone will produce FIRE-number at age 65 without further contributions. The 4% rule applies to all flavors — only the spending target changes.
- An immediate annuity pays income for life and moves the longevity risk to the insurer; a level annuity loses purchasing power to inflation, and the money is no longer liquid. Payout rates move with interest rates and age, so get current quotes rather than a rule of thumb. A common hybrid annuitises enough to cover essential spending and applies a withdrawal rate to the rest. In Singapore, CPF LIFE already plays that role for part of a retiree's savings.
- Lower than 4%. Trinity tested nothing longer than 30 years and its authors wrote that early retirees "should plan on lower withdrawal rates". Bengen's 1994 data showed 3%, and up to about 3.5%, lasting at least 50 years from every start year; Morningstar's 2025 base case falls to 3.3% at 40 years. Each of these assumes US-like returns, so flexible spending and other income in the first decade matter more the longer the horizon.
Method & sources
How it computes
Year-one withdrawal = portfolio × rate (3%, 3.5%, 4%, 4.5%); later years take the same dollar amount raised by inflation, the rule Bengen (1994) and Cooley, Hubbard & Walz (1998) tested. FIRE number = annual spending ÷ rate, exact in integer cents; progress is portfolio ÷ the 4% number, floored. US data, horizons of at most 30 years, before taxes and fees (RecaInvest.swrCompare).
What this tool implements
- The 4% rule withdraws 4% of the starting balance in year one, then inflation-adjusts that dollar amount (Bengen 1994; Cooley, Hubbard & Walz 1998).
- Horizons beyond 30 years are outside the original studies and are flagged as such: Trinity tested 15 to 30 years; Bengen showed 3%, and up to about 3.5%, lasting at least 50 years in every US start year 1926-1976.
- Each rate on the page carries its source: 3% and 3.5% Bengen 1994 (never under 50 years); 4% Bengen 1994 (never under 33 years, 50/50 stocks / intermediate Treasuries) and Trinity Table 3 (95% at 100% stocks, 98% at 75/25, 95% at 50/50 over 41 thirty-year periods 1926-1995); 4.5% Bengen 2020 (worst US case, a retirement starting 1 October 1968, 30% large-cap / 20% small-cap / 50% intermediate government bonds).
- The FIRE number is spending ÷ rate computed in integer cents and basis points, rounded half-up; the progress percentage is floored so a portfolio short of the number never displays 100%.
- Corrected 2026-10-19: the "60/40 US stock/bond portfolio" calibration (neither study tested 60/40); Trinity "~99% at 3.5%" (Trinity did not test 3.5%); "3.5% for 40 years and 3.0% for 50+" attributed to Trinity-style backtests (Trinity stops at 30 years; Morningstar 2025 gives 3.3% at 40); Pfau as "20 countries 1900-2010" (17 countries, 1900-2008); the Guyton-Klinger rules as cuts after "a crash year" and the basis of VPW (they trigger on the withdrawal rate drifting 20% from its start); unsourced healthcare, annuity-payout and tax-drag figures removed; a 99.6% portfolio printed as "100%".
Sources
- Bengen WP. Determining Withdrawal Rates Using Historical Data. Journal of Financial Planning 1994;7(4):171-180 (October 1994). Reprint: https://www.financialplanningassociation.org/sites/default/files/…
- Cooley PL, Hubbard CM, Walz DT. Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable. AAII Journal 1998;20(2):16-21, Table 3. https://web.archive.org/web/20260517115614/https://www.aaii.com/j…
- Bengen WP. Choosing The Highest Safe Withdrawal Rate At Retirement. Financial Advisor, 1 October 2020. https://www.fa-mag.com/news/choosing-the-highest-safe-withdrawal-…
- Arnott AC, Benz C, Kephart S, Guo J. The State of Retirement Income: 2025. Morningstar, 3 December 2025 (base case 3.9% for 30 years, 3.3% for 40; guardrails 5.2%). https://static.twentyoverten.com/5b5730126af0247efe4f2066/zT8sbuF…
- Pfau WD. Retirement Withdrawal Rates and Portfolio Success Rates: What Can the Historical Record Teach Us? MPRA Paper 31122, 26 May 2011. https://mpra.ub.uni-muenchen.de/31122/1/MPRA_paper_31122.pdf
- Internal Revenue Service. Topic no. 409, Capital gains and losses (long-term rates 0%, 15%, 20%). https://www.irs.gov/taxtopics/tc409
What can make this go out of date
- Morningstar revises its starting safe withdrawal rate each December; the 3.9% / 3.3% figures quoted on the page are its 2025 edition.
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