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The 4% Rule in Retirement: Your Safe First-Year Withdrawal

The 4% rule says you can withdraw 4% of your savings in the first year of retirement, raise that dollar amount with inflation every year, and expect the money to last about 30 years; on $1 million that's $40,000. Enter your savings to get your number next to Morningstar's 2026 figure of 3.9%.

Morningstar 2026 research Verified October 23, 2026

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4% rule: first-year withdrawal

$40,000

$3,333 a month, raised with inflation each year. With your other income that’s $70,000 a year.

Morningstar 2026 (3.9%)

$39,000

30 yrs, 90% success

Year 10 withdrawal

$49,955

At 5% steady return

38 years

Our take

Treat 4% as a starting point, not a promise. It was built for a 30-year retirement starting at 65 with a stock-bond mix and no flexibility. Retiring at 70 can justify more; retiring at 55, or refusing to cut spending in a bad year, calls for less.

Show the math

The rule comes from 1990s research (Bengen; the Trinity study) that found a 4% first-year withdrawal, adjusted for inflation, survived every 30-year period in U.S. history with a balanced portfolio. Morningstar’s 2026 “State of Retirement Income” puts the starting safe rate at 3.9% for 30 years at a 90% probability of success. The steady-return test uses your inputs, not history.

Next stepTest your own spendingYear-by-year balance with Social Security included.
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Where does the 4% rule come from?

It comes from 1990s research. William Bengen tested withdrawal rates against U.S. market history in 1994 and found that 4%, adjusted for inflation, lasted at least 30 years in every period he studied; the 1998 "Trinity study" reached similar results. Both assumed a stock-and-bond mix and no flexibility in spending. (Trinity study)

Savings 4% first year 3.9% first year
$500,000 $20,000 $19,500
$1,000,000 $40,000 $39,000
$1,500,000 $60,000 $58,500
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4 Percent Rule Calculator: Is 4% Still Safe in 2026?

Close to it. Morningstar's 2026 research puts the highest safe starting rate at 3.9% for a 30-year retirement with a 90% chance of not running out, with inflation-adjusted spending. (Morningstar: State of Retirement Income)

The rate moves with your situation:

  • Shorter horizon (retiring at 70): a higher rate is reasonable.
  • Flexible spending (cutting after bad years): higher too.
  • Early retirement (40+ years): lower.
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Our take: Social Security is your best safe withdrawal

Every dollar of Social Security is inflation-adjusted, lifelong income your savings don't have to produce — 3.6% higher in 2027 alone. Delaying it can lower the withdrawal rate your savings need more than any investment choice can. See the trade-off on the Social Security break-even calculator, test your exact spending on the how long will my money last calculator, and size the tax on withdrawals with the retirement tax calculator.

Frequently asked questions

Do I raise the withdrawal every year?

Yes. The rule fixes the first-year dollar amount and raises it by inflation each year, regardless of how the market did. That's what makes it conservative.

Is the 4% before or after taxes?

Before. Withdrawals from traditional IRAs and 401(k)s are taxable, so your spending money is less than the 4% figure.

Does the 4% include Social Security?

No. It applies only to your savings. Social Security and pensions come on top, which is why they matter so much.

Can I withdraw 5%?

Over 30 years, history says 5% fails noticeably more often. It's more reasonable if you start later, will cut spending in bad years, or have other guaranteed income.

Sources

Primary sources only. We re-check them whenever an agency publishes new figures.

  1. Research
    Morningstar — The State of Retirement Income for 2026
  2. Research
    Wikipedia — Trinity study (Cooley, Hubbard and Walz, 1998)
  3. SSA
    SSA — 2027 Social Security Changes (COLA fact sheet)· published October 14, 2026

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