What is the 4% rule and is it still valid?

The 4% rule originated from the Trinity Study (1998), which analyzed historical US stock and bond market returns to find a withdrawal rate that survived 30 years in 95%+ of scenarios. You withdraw 4% of your portfolio in year one and adjust the dollar amount for inflation each subsequent year. Criticisms and updates: (1) Many researchers now suggest 3.3–3.5% for 40–50 year retirements (early retirees face this). (2) The original study used US-only data; international diversification changes the math. (3) Sequence-of-returns risk is real — retiring in a bear market significantly increases the chance of portfolio failure. The 4% rule is a useful starting point for planning, not a guarantee. Flexible spending strategies that reduce withdrawals in down market years significantly improve the odds of long-term success.