Safe withdrawal rate calculator (the 4% rule tested)
How much you can withdraw each year in retirement: your plan tested against every starting year since 1872.
Safe maximum withdrawal rate by stock share and retirement length
Highest first-year rate, raised with inflation, that survived every start year since 1872. Includes the annual costs you entered.
| Stocks / bonds | 20 years | 25 years | 30 years | 40 years | 50 years |
|---|
What a safe withdrawal rate is
A safe withdrawal rate is the share of a portfolio you can take out in the first year of retirement, then raise with inflation every year, without running out of money over a chosen number of years. If you retire with 1,000,000 and withdraw 40,000 in year one, your withdrawal rate is 4%. In year two you take 40,000 plus inflation, whatever the market did.
"Safe" means the plan would have survived every historical starting year tested, not that it is guaranteed. The calculator above runs your plan from every starting year since 1872 and counts how many of those retirements would have lasted.
Where the 4% rule comes from
In 1994 financial planner William Bengen tested inflation-adjusted withdrawals on US stock and bond returns going back to 1926. The highest rate that survived every 30-year period was about 4%, with the worst start in the mid-1960s. The 1998 "Trinity study" by three professors at Trinity University reached a similar result. Since then, "the 4% rule" has become the most quoted rule of thumb in retirement planning.
What 150 years of data say
We ran the same test on US stocks and 10-year Treasury bonds from 1872 to 2025: total returns with dividends and coupons, annual rebalancing, withdrawals at the start of each year, raised with inflation, and no fees. The table shows the highest starting rate that survived every historical start year:
| Stocks / bonds | 20 years | 25 years | 30 years | 40 years | 50 years |
|---|---|---|---|---|---|
| 100 / 0 | 4.5% | 4.1% | 3.9% | 3.7% | 3.6% |
| 80 / 20 | 4.7% | 4.3% | 4.0% | 3.8% | 3.6% |
| 60 / 40 | 4.8% | 4.2% | 3.9% | 3.6% | 3.5% |
| 40 / 60 | 4.7% | 4.1% | 3.8% | 3.5% | 3.1% |
| 20 / 80 | 4.5% | 3.9% | 3.4% | 2.7% | 2.3% |
Three things stand out:
- Around 4% for 30 years holds up. With 60–80% in stocks, about 4% survived every 30-year period in 154 years of data. At exactly 4%, a 60/40 portfolio survived 99% of them; the one failure started in 1966.
- Longer retirements need a lower rate. Early retirees planning for 40–50 years should think in terms of 3.5% rather than 4%.
- Too little in stocks hurts too. A bond-heavy portfolio feels safer, but over long retirements it often failed earlier, because bonds barely kept up with inflation in several decades.
Why the worst years were the 1960s, not the 1930s
The retirement that started in 1966 is the classic worst case. Stocks went nowhere for 16 years after inflation, and inflation pushed every withdrawal higher at the same time. Bonds lost value as interest rates rose. Retirees who started in 1929 had a terrible first few years, but deflation kept their withdrawals small and the recovery came sooner.
This is sequence-of-returns risk: the same average return can have very different results depending on when the bad years arrive. Losses early in retirement hurt most, because you sell assets at low prices to fund spending and those assets are no longer there for the recovery. It is the same mathematics as drawdown recovery, with withdrawals making it worse.
How to use the result
- Treat the safe rate as a starting point, not a promise. It is the worst case of the past, and the future can be worse.
- Stay flexible. Retirees who cut spending by 10% after a bad year can usually start with a higher rate than a fixed rule allows.
- Watch the worst fall, not just the average. A portfolio's maximum drawdown in the first years of retirement matters more than its long-run return.
- Count fees and taxes. 1% a year in fees lowers the safe rate by roughly half a percentage point to a full point over 30 years. Enter your costs in the calculator.
Limitations
The data are US stocks (S&P 500 and its predecessors, from Robert Shiller's data set to 1969, the S&P 500 index to 1993, SPY after) and a 10-year US Treasury bond, in US dollars. The US was one of the best-performing markets of the last 150 years, so these results may be optimistic for other countries and for the future. Before 1970 the stock data use monthly average prices, which smooths returns slightly. Taxes, which depend on your country and account type, are not included.
Frequently asked questions
What is the 4% rule?
The 4% rule says you can withdraw 4% of your portfolio in the first year of retirement and raise that amount with inflation every year, and the money should last at least 30 years. It comes from William Bengen's 1994 study of US stock and bond returns and the 1998 Trinity study. In our test on data since 1872, about 4% survived every 30-year period with 60–80% in stocks.
Is the 4% rule still safe?
Historically it held up for 30-year retirements with a balanced or stock-heavy portfolio, but it is a worst case of the past, not a guarantee. Longer retirements, high fees, a bond-heavy portfolio or a worse future than the US past all argue for a lower rate, around 3–3.5%. Flexible spending after bad years makes any rate safer.
How much can I withdraw from 1 million in retirement?
At a 4% rate, 40,000 in the first year, then the same amount plus inflation each year. Historically that survived about 99% of all 30-year periods since 1872 with a 60/40 portfolio. For a 40-year retirement, about 3.6% (36,000) survived every period.
What is sequence-of-returns risk?
It is the risk that bad returns arrive early in retirement. Withdrawals force you to sell after a fall, so the portfolio shrinks faster and has less left to recover. Two retirements with the same average return can end very differently: the worst historical start, 1966, had weak real stock returns and high inflation in its first decade.
What stock allocation gives the highest safe withdrawal rate?
In US data since 1872, 60–80% stocks gave the highest safe rates for 25–50 year retirements. Below about 40% stocks, safe rates fell sharply over long horizons, because bonds often failed to keep up with inflation. The best mix also depends on how large a fall you can sit through.
From assumptions to real numbers, free
- Strategy vs buy & hold for the S&P 500, Nasdaq-100, gold, oil, Bitcoin and Nvidia: return, Sharpe ratio, worst fall
- Hedge Health: are bonds protecting stocks right now?
- Drawdowns, correlations, momentum and the glossary for every term
Go deeper: in-depth guides
What a 60/40 portfolio is, its historical returns and worst years, why it failed in 2022, and how to tell when stocks and bonds stop protecting each …
Max drawdown explained: the risk number that matters mostWhat max drawdown means, how to calculate it, the S&P 500's biggest drawdowns and recovery times, and why it is a better measure of risk than volatil…
Gold vs bonds: which protects a portfolio better in a crash?Gold vs bonds as a portfolio hedge: how each did in every big sell-off since 2007 and over 150 years, what each costs you, and why holding both beat …
More calculators
What your investment could grow to when dividends are reinvested, compared with taking them as cash.
Compound interest calculator (daily, monthly or yearly)How much your money grows with daily, monthly or yearly compounding, with or without monthly contributions.
Savings rate & investing calculatorYour savings rate, what investing it could become, and your financial-independence number.
Drawdown recovery calculatorHow much gain — and how many years — it takes to recover from a loss.
Start investing — learning pathEight short lessons from the first euro to a running portfolio.
Illustration only — not investment advice and not a forecast. Real returns vary from year to year and can be negative. Disclaimer.