The percentage of a portfolio you can spend annually with low odds of running out.
The famous 4% rule comes from the Trinity study: 4% of the starting balance, inflation-adjusted yearly, historically survived 30-year retirements. Longer horizons argue for 3–3.5%.
Example: $1.2M × 4% = $48,000 first-year withdrawal.
FAQ
What is Safe Withdrawal Rate in simple terms?
The famous 4% rule comes from the Trinity study: 4% of the starting balance, inflation-adjusted yearly, historically survived 30-year retirements. Longer horizons argue for 3–3.5%.