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For 30 years, the '4% rule' has been shorthand for how much a retiree can pull from savings each year without running out. Withdraw 4% in year one, adjust that dollar amount for inflation each year after, and the number was supposed to hold for a 30-year retirement.
That single number is now in dispute. Bill Bengen, the financial adviser who created the 4% rule in 1994, has updated his own research and now says a starting rate closer to 4.7%, or even 5.5% for some retirees, holds up. Morningstar's newer research lands the other direction, putting the safe starting rate for someone retiring in 2026 closer to 3.9%. Neither side is wrong exactly. They're modeling different portfolios and different assumptions, which means the rule that matters is the one built around your actual numbers.
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Pick a rate to test first
Choose the starting point you want to run the numbers on. You can come back and try another.
A reasonable starting point if you want more of a safety margin.
Interactive toolCheck your withdrawal against your real billsUse it after you've worked out what 3.9%, the more cautious current estimate means in dollars below.Show the toolHide the tool
Protect housing, food, medications, and utilities first, then download a snapshot for your next call or budget review.
Why the Number Keeps Moving
The original 4% rule was tested against market history through the mid-1990s and assumed a fairly plain mix of stocks and bonds. Retirees today are often living longer, which pushes toward a lower rate, while many now hold more diversified portfolios, which can support a somewhat higher one. That split is most of why you're seeing 3.9% from one source and 5.5% from another this year, not because either side is careless.
Turn a Rate Into Your Own Monthly Number
A percentage doesn't mean much until it's a dollar figure you can compare to your bills. The math is simple: take your total retirement savings, multiply by your chosen rate, then divide by 12 for a monthly amount. On $500,000 at 4%, that's $20,000 a year, or about $1,667 a month, before taxes.
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Now do the same math with your own number and 3.9%, the more cautious current estimate, then enter your monthly figure into the calculator below alongside your essential bills. That comparison, not the rate by itself, tells you whether the number actually works.
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Compare your withdrawal to your essentials
Enter the monthly amount you calculated from your savings, then your essential monthly bills.
Essential spending total: $2,230
Left over after essentials: -$563 • Essentials use 134% of income.
If this result is negative, 3.9%, the more cautious current estimate alone isn't covering your essentials, and it's worth testing a different rate or a smaller withdrawal.
What to Do If the Number Comes Up Short
A negative result doesn't mean the plan has failed. It means the rate you tested, on its own, isn't enough to cover essentials without help from Social Security, a pension, or other income. Most retirees are already combining sources rather than living on portfolio withdrawals alone.
If the gap is real even after adding other income, a few adjustments tend to move the number more than panic does.
ChecklistTry these before assuming the plan doesn't workWork through them in order.Show the checklistHide the checklist
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If stretching monthly savings further is the real goal, Low-Cost Habits That Stretch Retirement Savings covers small, repeatable changes rather than a one-time cut.
When to Get a Second Opinion
A rule of thumb, even an updated one, is a starting point, not a personal plan. Your actual mix of investments, your health, and how long your money needs to last are specific to you in a way no single percentage can reflect.
ChecklistSigns it's worth paying for a second opinionAny one of these is reason enough to ask for help beyond a rule of thumb.Show the checklistHide the checklist
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A fee-only financial planner who has to act in your interest can run your specific numbers instead of a generic model. If you're not sure where to find one, the Consumer Financial Protection Bureau's retirement planning tools are a reasonable place to start before you pick an adviser.
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Save the numbers you ran here so you can bring them to a planner or revisit them later.
Common questions
Is the 4% retirement withdrawal rule still accurate?
It's being reconsidered rather than thrown out. Bill Bengen, who created the rule in 1994, now says a starting rate closer to 4.7%, or up to 5.5% for some retirees, can hold up with a more diversified portfolio. Morningstar's newer research recommends a more conservative rate closer to 3.9% for people retiring in 2026. The disagreement comes from different assumptions about portfolio mix and how long retirement savings need to last, not a simple right or wrong answer.
How do I turn a withdrawal rate into a monthly dollar amount?
Multiply your total retirement savings by the rate you're testing, then divide by 12. On $500,000 at 4%, that works out to $20,000 a year, or about $1,667 a month, before taxes. Compare that monthly figure to your actual essential bills, not just to the percentage, to see whether it holds up.
What should I do if my withdrawal rate doesn't cover my essential bills?
First, add in Social Security, a pension, or any other guaranteed income you have, since most retirees aren't living on portfolio withdrawals alone. If a real gap remains, test a lower withdrawal rate, look for one or two recurring costs that could shrink, and consider whether part-time work or delaying withdrawals would help before assuming the whole plan is off track.
Should I hire a financial planner to figure out my safe withdrawal rate?
A rule of thumb is a starting point, not a personalized plan. A fee-only financial planner who has to act in your interest can model your specific investments, health, and time horizon in a way a general percentage can't. If you're not sure where to start looking, the Consumer Financial Protection Bureau's retirement planning tools are a reasonable first stop.
