Is the 4% rule still safe?

It's a reasonable starting point, but not a guarantee: lower bond yields, higher valuations, longer retirements, and fees can all push the safe rate below 4%. Test your own situation rather than assuming.

Does the 4% rule account for inflation?

Yes, you withdraw 4% in year one, then increase that dollar amount by inflation each year, so your spending power stays roughly constant.

What is a safe withdrawal rate?

It depends on your horizon, allocation, and fees. Many planners use 3.5 to 4% as a baseline; the honest answer is to simulate your specific plan and aim for a high probability of success.

The 4% Rule, Explained: How Long Will Your Retirement Savings Last?

6 min read · Updated 2026-06-15

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The 4% rule is the most-quoted shortcut in retirement planning: withdraw 4% of your portfolio in your first year, then adjust that dollar amount for inflation each year, and your money should last about 30 years.

It's a useful starting point, but it's a rule of thumb built on specific assumptions, not a guarantee. Here's where it comes from, where it breaks, and how to test a withdrawal rate against your own plan.

Test your retirement plan →

Where the 4% rule comes from

It traces back to research in the 1990s (Bengen, and the “Trinity study”) that tested historical withdrawal rates against US market history. The finding: a roughly 50/50 to 60/40 stock/bond portfolio withdrawing about 4% (inflation-adjusted) survived every historical 30-year period in the sample. Four percent became the famous benchmark.

Why it's a rule of thumb, not a guarantee

The 4% figure depends heavily on its assumptions, and changing any of them changes the answer:

•Time horizon: 4% targets ~30 years. Retire early and need 40+ years, and the safe rate drops.
•Asset allocation: too conservative and growth can't keep up; too aggressive and a bad early decade can sink you.
•Fees: every 1% in fees comes straight out of your sustainable withdrawal.
•Starting conditions: beginning retirement at high valuations or low bond yields is tougher than the historical average.

Sequence-of-returns risk is the real danger

Two retirees can earn the same average return over 30 years and get wildly different outcomes, because the order matters. Bad returns in the first few years, while you're also withdrawing, permanently shrink the base your portfolio compounds from. The same bad years late in retirement barely matter.

This is why the average return is the wrong thing to plan around. What you want to know is: across many possible return sequences, how often does my plan survive?

How to pressure-test your own number

Instead of trusting 4% as gospel, run a Monte Carlo on your actual plan (your balance, withdrawal amount, horizon, and allocation) and look at the probability of success across thousands of return paths. Then vary one thing at a time (withdraw 3.5%, retire two years later, shift the stock/bond mix) to see what moves the odds most.

Odds a 30-year retirement survives, by withdrawal rate (illustrative)

3.0% withdrawal

98%

3.5% withdrawal

93%

4.0% withdrawal

87%

4.5% withdrawal

74%

5.0% withdrawal

60%

Hypothetical figures for a balanced portfolio, for intuition only: your allocation, horizon, and fees change them. Simulate your own plan.

Try it yourself

Retirement Withdrawal LabTest a withdrawal rate against thousands of return paths.Open tool →Monte Carlo SimulationSee the odds your savings last, and what improves them.Open tool →Financial Goals PlannerFind out if you're on track for a savings target.Open tool →

FAQ

Is the 4% rule still safe?: It's a reasonable starting point, but not a guarantee: lower bond yields, higher valuations, longer retirements, and fees can all push the safe rate below 4%. Test your own situation rather than assuming.
Does the 4% rule account for inflation?: Yes, you withdraw 4% in year one, then increase that dollar amount by inflation each year, so your spending power stays roughly constant.
What is a safe withdrawal rate?: It depends on your horizon, allocation, and fees. Many planners use 3.5 to 4% as a baseline; the honest answer is to simulate your specific plan and aim for a high probability of success.

Key terms in this guide

Plain-English definitions in the Learning Hub.

Sustainable starting withdrawal →Sequence-of-returns risk →Monte Carlo simulation →Probability of success →

Already computed · real data

50/50 on real data

Grew steadily in this window

A 50/50 stock and bond mix (VTI 50%, BND 50%) grew from $10,000 to $35,979 between May 2007 and Oct 2026 (6.8% a year). Its worst fall was -26%, from Oct 2007 to Feb 2009, and it took 38 months (about 3 years) to get back to that high.

Real 2007-05 to 2026-10 data, dividends reinvested, rebalanced yearly. Past performance doesn't predict future results.

A mix like the ones the original 4% research tested, with no withdrawals: open it in the backtester to add a yearly withdrawal.

Growth of $10,000, May 2007 to Oct 2026

A 50/50 stock and bond mix (VTI 50%, BND 50%)

Run it with your own numbers →

Keep watching this portfolio, free. A free account saves it as your plan and checks it for you every month.

For educational and informational purposes only, not financial, investment, tax, or legal advice. Backtests are hypothetical; past performance does not guarantee future results.