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The 4% rule is a guideline for retirees to determine how much money they can withdraw from their retirement savings each year without running out of money.
Developed by financial advisor William Bengen in 1994, the rule suggests that retirees can withdraw 4% of their portfolio in the first year of retirement, and then adjust that amount for inflation each subsequent year.
Calculate Your RateInitial Portfolio: $1,000,000
4% Withdrawal Rate: $40,000 per year
Monthly Income: $3,333
Adjusted annually for inflation
Note: This is a simplified example. Your actual safe withdrawal rate may vary based on your specific circumstances.
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