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The 4% rule takes 4% of the starting portfolio in year one and then raises that amount with inflation, regardless of market moves. It came from historical US data over 30-year retirements and implies a portfolio of 25 times annual spending.
Safe withdrawal
Year 1 = portfolio × rate; Year k = year 1 × (1+inflation)^(k-1)
Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
No. It survived most historical 30-year windows but not all, and it assumed a specific asset mix and low fees.
Flexibility. Trimming withdrawals after poor years materially improves the odds compared with a rigid rule.