The 4% Rule: A Starting Point for Retirement Income
The 4% rule is a historical retirement-withdrawal framework, not a promise. It is commonly used as a starting point for estimating first-year withdrawals from a diversified portfolio.
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Four percent of $1 million is $40,000; of $2 million is $80,000; of $3 million is $120,000. Taxes and other income are separate considerations.
Sequence risk matters
Poor returns early in retirement can be especially damaging when withdrawals are occurring. Flexible spending can help a plan adapt.
Use it as a benchmark
Retirement length, asset allocation, fees and spending flexibility can justify a different starting rate. Model multiple rates rather than assuming 4% fits everyone.
How to use this number responsibly
Use the result as a planning range rather than a forecast. Re-run the calculation when your balance, contribution rate, debt, retirement date, tax situation or spending target changes. For investment projections, compare multiple return assumptions because future market returns are unknown.
What this calculator does not know
RetirementMetric does not know your complete tax situation, benefits, investment holdings, insurance needs or household expenses. The tools are educational estimates, not individualized investment, tax or legal advice.
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