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A guideline that withdrawing about 4% of a portfolio in year one is likely to last 30 years.
The 4% rule is a starting estimate for retirement spending: withdraw 4% of your portfolio the first year, then adjust for inflation each year after. Historically this had a high chance of lasting at least 30 years. It implies a target nest egg of roughly 25 times annual expenses, though real plans should flex with markets and longevity.
A $1.5 million portfolio supports an initial withdrawal of about $60,000 under the 4% rule.
FIRE — Financial Independence, Retire Early — is not one strategy. It is a spectrum of approaches from extreme frugality to comfortable early semi-retirement. Here is how each variant works.
Read article →Educational disclaimer: All content on WealthSerene.com is for educational purposes only and does not constitute investment advice. Projections and calculations are illustrative — actual results will vary based on market conditions, your specific situation, and many factors outside this tool’s scope. Always consult a qualified financial professional for advice specific to your situation. View full disclosures →