Money The 4 % rule: how much do you need?
Enter how much you spend each month and what you already have. The calculator shows your freedom number and when your savings could get you there.
Model calculation without inflation, costs or taxes. The 4 % rule comes from US studies on stocks and bonds and is no guarantee. Not investment advice.
What the 4 % rule says
US studies looked at how much you can withdraw each year from a portfolio of stocks and bonds without running out within 30 years. The answer: about 4 % in the first year, then adjusted for inflation. Put the other way round, you need about 25 times your yearly spending.
Why more caution often makes sense
If you stop working early, the money has to last much longer than 30 years. Many therefore plan with 3 to 3.5 %. Taxes, costs and bad market years right at the start can put extra strain on the plan.
The lever is your spending
Every dollar or euro you spend less each month lowers your freedom number by 25 times as much per year. Spending 100 less a month means 30,000 less you need. The Money Compass shows where your money goes.
Frequently asked questions
Is the 4 % rule safe?
No, it is a rule of thumb based on history. Future returns may be lower. A lower withdrawal rate gives more safety.
Does a pension count?
Yes. Enter it as other income, so your portfolio needs to deliver less.
Does it apply outside the US?
The principle does. Consider local taxes, costs and that the studies are based on US markets.