Safe Withdrawal Rate Calculator

What the 4 % rule actually says

The Trinity Study (Cooley, Hubbard, and Walz, 1998) back-tested fixed-percentage withdrawals against US market history from 1926 onward. The headline finding: a 50/50 stocks/bonds portfolio, with 4 % of starting wealth withdrawn each year and adjusted for inflation, survived 30 years in the overwhelming majority of historical scenarios.

The 4 % rule is a useful starting heuristic, not a guarantee. It assumes US-style equity returns, a 30-year horizon, and a relatively passive withdrawal strategy. Early retirees with 40+ year horizons, or those investing in different markets and asset mixes, often land on a different number.

RetireCrunch's calculator lets you pick your own withdrawal rate, horizon, and portfolio mix, then runs Monte Carlo to report the actual success probability. Use it to stress-test 4 %, 3.5 %, 3 %, or whatever target you want.

Choosing your withdrawal rate

• 30-year traditional retirement: 3.5 – 4.0 % is the classic range. Higher with flexible spending; lower if you want a big safety margin.
• 40 – 50-year early retirement: 3.0 – 3.5 % is more defensible. Sequence-of-returns risk dominates in years 1–10.
• Coast / Barista FIRE: A higher withdrawal rate works if you have ongoing income or a flexible exit option.
• Dynamic guardrails: Strategies like Guyton-Klinger or VPW typically support a higher starting rate (5 – 6 %) at the cost of variable income.

Safe withdrawal rate FAQ

What is a safe withdrawal rate?

The safe withdrawal rate (SWR) is the annual percentage of your starting portfolio that you can spend each year — adjusted for inflation — without running out of money over a defined retirement horizon. The classic Trinity Study (1998) found that 4 % of starting wealth, withdrawn annually for 30 years, had a high historical success rate across stock/bond portfolios.

Where does the 4 % rule come from?

From the Trinity Study by Cooley, Hubbard, and Walz (Trinity University, 1998), which back-tested fixed-percentage withdrawals against US historical returns from 1926 onward. With a 50/50 stocks/bonds portfolio and 4 % inflation-adjusted withdrawals, the portfolio survived 30 years in the vast majority of historical scenarios.

Is 4 % still safe today?

It depends on your time horizon, asset allocation, and starting valuations. Many researchers (Bengen, Pfau, Kitces) have updated the work — some argue 4 % is conservative; others point to today's lower bond yields and high equity valuations as a reason to consider 3.0–3.5 %. RetireCrunch lets you pick your own withdrawal rate and reports the success probability for it specifically.

What's the difference between SWR and Monte Carlo?

The 4 % rule is a single deterministic guideline. Monte Carlo simulation tests a withdrawal rate against thousands of randomized return sequences and reports a probability of success. RetireCrunch combines both: pick a withdrawal rate, see the Monte Carlo success rate for your specific plan, horizon, and asset mix.

What about dynamic / guardrail withdrawal strategies?

Strategies like Guyton-Klinger guardrails or variable-percentage withdrawal (VPW) adjust your spending based on portfolio performance, which can sustain a higher long-term withdrawal rate than a static 4 %. The trade-off is income volatility. RetireCrunch's default is the inflation-adjusted fixed-percentage approach for comparability with the Trinity Study.

Does the SWR cover the full early-retirement horizon?

The classic 4 % rule was calibrated for a 30-year retirement. If you're retiring at 45 with a 40–50 year horizon, you typically want a more conservative rate (3.0–3.5 %) or a flexible strategy. RetireCrunch lets you set any horizon and re-runs Monte Carlo against it.