4% rule
Also called: Safe withdrawal rate
A retirement rule of thumb: withdraw 4% of savings in the first year, then adjust for inflation, and the money has historically lasted 30 years.
The rule comes from William Bengen's 1994 study of U.S. market history, which found a 4% starting withdrawal survived every 30-year period he tested with a stock-and-bond portfolio. Flip it around and you get a savings target: 25 times your yearly spending.
It's a starting point, not a guarantee. Retirements longer than 30 years, high fees, a very conservative portfolio, or a bad market in the first few years all argue for a lower rate. Flexible spending — cutting back after bad years — lets many retirees safely spend more.
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Disclaimer: Definitions are general education, not financial, tax, or legal advice. Figures are for the 2026 tax year unless noted.