Use the 4% rule or another withdrawal rate to estimate annual and monthly portfolio withdrawals and the portfolio needed for a spending target.
How the 4% rule calculation works
A withdrawal-rate calculation multiplies a portfolio by the selected first-year rate. The reverse calculation divides desired annual spending by that rate to estimate a starting portfolio target.
The result does not test a particular asset allocation, retirement length, tax system, fees, or sequence of returns. The commonly discussed 4% rule is a historical planning guideline; changing the rate changes both income and the required portfolio.
Frequently asked questions
Is 4% guaranteed to be safe?
No. Sustainability depends on market returns, inflation, fees, taxes, portfolio mix, spending changes, and retirement length.
Is the monthly amount a fixed paycheck?
No. It is the first-year annual estimate divided by 12 for comparison.
Does this calculator increase withdrawals with inflation?
No. It only calculates the starting withdrawal and target from the values entered.