4% Rule Calculator
The 4% rule calculator determines how much you can safely withdraw annually from your retirement portfolio. Based on the Trinity Study, this rule suggests you can withdraw 4% of your initial portfolio (adjusted for inflation) with high confidence of not running out over 30 years.
4% Rule Formula
Annual Withdrawal = Portfolio × 4% Required Portfolio = Annual Expenses × 25
Portfolio Size vs Annual Income
| Portfolio | 4% Rule (Annual) | 3.5% Rule (Conservative) | 3% Rule (Very Safe) |
|---|---|---|---|
| $500,000 | $20,000 | $17,500 | $15,000 |
| $750,000 | $30,000 | $26,250 | $22,500 |
| $1,000,000 | $40,000 | $35,000 | $30,000 |
| $1,500,000 | $60,000 | $52,500 | $45,000 |
| $2,000,000 | $80,000 | $70,000 | $60,000 |
4% Rule Calculator Implementation
``javascript
function calculate4PercentRule(portfolio, withdrawalRate = 4, inflationRate = 2.5, years = 30) {
const initialWithdrawal = portfolio * (withdrawalRate / 100);
let yearlyWithdrawals = [];
let withdrawal = initialWithdrawal;
let remaining = portfolio;
for (let year = 1; year <= years; year++) {
remaining = remaining - withdrawal;
remaining = remaining * 1.07; // Assume 7% returns
withdrawal = withdrawal * (1 + inflationRate / 100); // Inflation adjust
yearlyWithdrawals.push({
year,
withdrawal: withdrawal.toFixed(2),
remaining: remaining.toFixed(2)
});
}
return {
initialWithdrawal: initialWithdrawal.toFixed(2),
monthlyWithdrawal: (initialWithdrawal / 12).toFixed(2),
year30Balance: yearlyWithdrawals[29]?.remaining,
schedule: yearlyWithdrawals
};
}
console.log(calculate4PercentRule(1000000, 4));
// { initialWithdrawal: '40000', monthlyWithdrawal: '3333.33' }
``
Adjusting Withdrawal Rate
For early retirement (40+ years), consider 3.5% or lower. For shorter retirements or conservative planning, 3% provides more safety margin. Flexible spending allows adjusting withdrawals based on market performance.