What Is the 4% Rule?
The 4% rule is a retirement planning guideline based on historical US market studies, which found that withdrawing 4% of a portfolio in the first year of retirement and then adjusting that amount for inflation would have lasted at least 30 years in most historical periods tested. It is often expressed as saving 25 times annual expenses.
Origin
The idea comes from research by financial planner William Bengen in 1994 and the later Trinity Study, both based on historical returns.
Limitations
It is a historical rule of thumb, not a guarantee; results depend on future returns, inflation, fees, time horizon, and portfolio mix.
🧮 Calculate It Yourself
Put 4% Rule into practice with these free calculators — no sign-up, nothing stored.
🔗 Related Terms
More Retirement & Savings Terms
📖 Browse all glossary terms or explore all free calculators.
Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.