Does this account for inflation?

No — the projection is a nominal figure and assumes a constant rate of return, which real markets don't provide year to year.

What return rate should I assume?

That depends on your actual portfolio and risk tolerance — conservative long-term planning often uses a more modest assumed return than an aggressive, equity-heavy projection would.

Who came up with the 4% rule and how was it tested?

Financial planner William Bengen published it in 1994 after testing withdrawal rates against actual historical U.S. stock and bond returns across rolling 30-year periods starting between 1926 and 1963, looking for the highest rate that never ran out of money in any period tested.

Is 4% still considered safe today?

It remains a widely used starting point, but it's debated — some later research suggests a lower rate is more conservative for today's market conditions and longer retirements, while other analyses argue a higher rate has also held up. Treat it as a planning heuristic, not a guarantee.

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Finance

Retirement Calculator

Project retirement savings and income.

🔒 Runs entirely in your browser — nothing here is ever uploaded

About the Retirement Calculator

Projects your retirement savings balance from your current age, savings, and monthly contributions, then estimates a sustainable monthly income using the commonly cited '4% rule.'

How to use it

Enter your Current age and Retirement age.
Enter your Current savings and Monthly contribution.
Enter your Expected annual return (%).
Read your projected retirement corpus and estimated monthly income in the result panel and chart.

Formula

Future value = current savings compounded to retirement age, plus the future value of monthly contributions
Estimated monthly income = (Projected balance × 4%) ÷ 12

The 4% figure traces to William Bengen's 1994 study "Determining Withdrawal Rates Using Historical Data" (Journal of Financial Planning), which found a 4% first-year withdrawal, adjusted for inflation thereafter, held up across historical 30-year U.S. market periods for a 50-75% stock portfolio. It's a widely cited planning heuristic, not a guarantee for any individual's actual portfolio or timeframe.

Worked example

Starting with $500,000 at age 30 and contributing $1,500/month at an assumed 8% annual return until age 60 projects to a substantial retirement balance, with an estimated sustainable monthly income based on the 4% withdrawal guideline.

Recommendations

• Small increases to monthly contributions early on tend to matter more than the same increase started later — run both scenarios to compare.
• Revisit this yearly as your savings, income, and goals change, rather than treating one projection as fixed.
• Pair the projected balance with a realistic withdrawal plan — the 4% rule is a starting point, not a guarantee.

Frequently asked questions

A commonly cited rule of thumb suggesting you can withdraw about 4% of your retirement savings in the first year, adjusting for inflation after, with a reasonably low risk of running out of money over a roughly 30-year retirement. It's a guideline, not a guarantee.

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Disclaimer

Illustrative estimate only, not financial or tax advice. Verify figures with a licensed adviser or your local tax authority.