4% Rule Calculator
Apply the 4% rule to estimate retirement income or required portfolio size.
- Last reviewed
- August 26, 2026
- Cost
- Free to use
- Data
- Runs in your browser
- Reviewed by
- Anton Jonson
Annual Withdrawal
—
Monthly Withdrawal
—
Required Portfolio
—
Methodology
How this calculator handles inputs
This calculator uses the values you enter above and applies the formula explained in the guide below. Results update in the browser and are intended for quick planning, comparison, and sanity-checking.
- Use consistent periods, currencies, and units across inputs.
- Review any assumptions before using the result in a decision.
- Recalculate when rates, prices, tax rules, or business terms change.
Important note
This tool provides general planning information only. It is not tax, legal, financial, accounting, or investment advice. Check the current rules for your location and speak with a qualified professional before making a high-stakes decision.
Guide
How it works
Use this calculator to apply the 4% rule to estimate retirement income or required portfolio size.
What this calculator does
The 4% rule calculator converts a retirement portfolio into an estimated annual withdrawal. It can also work backward from desired annual income to the portfolio needed.
It uses:
- portfolio value
- desired annual income
- 4% withdrawal rate
- monthly income conversion
4% Rule Formula
Annual Withdrawal = Portfolio × 0.04
Where:
- Portfolio = retirement savings balance
- 0.04 = 4% withdrawal rate
- Required Portfolio = desired income ÷ 0.04
- Monthly Withdrawal = annual withdrawal ÷ 12
Example calculation
If:
- Portfolio = 1,000,000
- Withdrawal rate = 4%
- Annual withdrawal = 1,000,000 × 0.04
- Annual withdrawal = 40,000
Then:
- Monthly withdrawal = 40,000 ÷ 12
- Monthly withdrawal = 3,333
- Required portfolio for 40,000 income = 1,000,000
- The portfolio target is 25 times annual income
The 4% rule withdrawal is 40,000 per year.
What is the 4% rule?
The 4% rule is a retirement planning guideline that starts withdrawals at 4% of the portfolio in the first year. It is often used as a simple estimate for retirement income and portfolio targets.
Why the 4% rule matters
- gives a quick retirement income estimate
- translates spending into a portfolio target
- supports FIRE planning
- creates a simple starting benchmark
When to use this calculator
- estimating income from a portfolio
- working backward from desired income
- checking a FIRE number
- comparing withdrawal assumptions
Common mistakes
- treating 4% as guaranteed
- ignoring taxes and fees
- applying it without considering age
- forgetting spending flexibility matters
4% rule vs safe withdrawal rate
The 4% rule is a fixed shortcut. Safe withdrawal rate is a broader calculation that can change with expected returns, inflation, and retirement length.
Use the 4% rule for a quick estimate and safe withdrawal analysis for deeper planning.
FAQs
What is the 4% rule?
The 4% rule estimates retirement income by withdrawing 4% of a portfolio in the first retirement year.
How do you calculate the 4% rule?
Multiply portfolio value by 0.04, or multiply desired annual income by 25 to find the required portfolio.
What is a good 4% rule target?
A common target is 25 times annual retirement spending.
What is the difference between the 4% rule and safe withdrawal rate?
The 4% rule is a benchmark. Safe withdrawal rate is customized to your assumptions.
Continue exploring
Related calculators
Explore the next calculations most relevant to this topic.
retirement-planning
Safe Withdrawal Rate Calculator
Estimate a sustainable withdrawal rate and withdrawal amount for a retirement portfolio.
retirement-planning
Retirement Number Calculator
Estimate the portfolio needed to support desired retirement income.
retirement-planning
FIRE Calculator
Calculate your financial independence number and estimated years to FIRE.