The rule
The 4% rule says that if you withdraw 4% of your savings in the first year and then raise the amount with inflation, the money has historically lasted about 30 years. It goes back to research by William Bengen in 1994 and the so-called Trinity study in 1998, which both arrived at a sustainable rate of 4% for a portfolio with a moderate mix of shares and bonds.[1] Turned around: 100 divided by 4 is 25, so you need 25 times your yearly spending.
What newer research says
Morningstar's 2025 study puts the highest safe starting rate at 3.9%, for a 30-year retirement with a 90% probability that the money lasts and 30–50% of the portfolio in shares. Retirees who are willing to adjust their spending when markets fall could start at nearly 6%.[2]
| Yearly spending | At 4% (25 times) | At 3.5% (about 29 times) |
|---|---|---|
| 20,000 EUR | 500,000 EUR | 571,000 EUR |
| 30,000 EUR | 750,000 EUR | 857,000 EUR |
| 40,000 EUR | 1,000,000 EUR | 1,143,000 EUR |
Your own numbers
The calculator counts in today's money, so use a return after inflation. Over 125 years, global shares have returned roughly 5% a year after inflation.[3] The result is an illustration: it assumes the same return every year and ignores taxes and fees.
The limits of the rule
- It is built on 30 years. If you stop working at 45, the money has to last much longer, and a lower rate is safer.
- It is built on historical data. The future can be worse than the past.
- Taxes and fees are not included. Both lower what you can actually spend.
- A pension lowers the need. A state or occupational pension covers part of your spending, so your own savings have to cover less.
Common questions
Does the 4% rule mean I never run out?
No. It describes what has worked historically over about 30 years. It is a planning tool, not a guarantee.
Should all the money be in shares?
The studies behind the rule use a mix of shares and bonds. Morningstar's 3.9% assumes 30–50% in shares. When you live on the money, large falls hurt more, which is why the mix matters.
Sources & further reading
We cite independent authorities so you can verify everything yourself. Last reviewed 15 Sept 2026.