Calculators
See how much you need to retire, what your savings could pay each year, and how long they might last.
Estimates for planning only.
Savings needed to retire
$600,000
Your savings fall $396,000 short of the $600,000 a 4% rate calls for. A 4% withdrawal lasts 25 years on steady returns, and also survives a 20% fall in your first year.
First-year withdrawal at 4%
$8,160
Yearly spending this supports
$40,160
Still to save
$396,000
Left at the end, in today's dollars
$147,282
The same spending, savings and returns, at each rate.
| Rate | Savings needed | First-year withdrawal | Lasts |
|---|---|---|---|
| 3% | $800,000 | $6,120 | All 25 years |
| 3.5% | $685,714 | $7,140 | All 25 years |
| 4% | $600,000 | $8,160 | All 25 years |
| 4.5% | $533,333 | $9,180 | All 25 years |
| 5% | $480,000 | $10,200 | All 25 years |
The 4% rule is a rule of thumb for how much you can spend from your savings in retirement. In your first year you withdraw 4% of your balance. Every year after that you withdraw the same dollar amount, raised by inflation, regardless of how markets performed. On the historical data it was tested against, that approach lasted at least 30 years.
Read in reverse, it gives you a savings target. Withdrawing 4% is the same as dividing by 25, so you need about 25 times the yearly spending your savings have to fund.
Nobody picked 4% as a good round number. It was about the highest starting rate that survived the worst retirement periods in the US record, including the Great Depression and the high inflation of the 1970s. Its appeal is the balance it strikes: 3% was very safe but left most retirees spending far less than they could have, while higher rates failed in the worst periods. In Bengen's tests, 5% lasted only about 20 years for people who retired in the late 1960s and early 1970s.
The arithmetic also helps explain it. With no return above inflation at all, 4% lasts exactly 25 years. A modest real return stretches that to 30 years or more.
The rule comes from William Bengen, a US financial planner, whose article "Determining Withdrawal Rates Using Historical Data" appeared in the Journal of Financial Planning in October 1994. He tested inflation-indexed withdrawals against actual US share and government bond returns. Starting at 4%, no historical case ran out of money in under 33 years, and he recommended holding between 50% and 75% in shares. Bengen did not call it the 4% rule. The name came later.
In 1998, three Trinity University professors (Cooley, Hubbard and Walz) published what became known as the Trinity study. Rather than focusing on the single worst case, it reported how often each rate succeeded. A 4% inflation-indexed withdrawal from a portfolio mostly in shares succeeded in the large majority of 30-year periods, commonly reported as about 95%, on US data from 1926 to 1995.
The debate has continued. Bengen raised his own figure over time, and his 2025 book A Richer Retirement puts it at 4.7% for a more diversified US portfolio. Morningstar went the other way, estimating 3.9% in its latest US research, based on a 90% chance of money remaining after 30 years. Both are American results. The most relevant Australian work is covered under the limitations below.
The savings target is your yearly spending, less other income, divided by the withdrawal rate. The drawdown takes your first withdrawal at the start of year one, applies the investment return to what remains, and raises the withdrawal by inflation each year. The second line on the chart repeats this with a 20% fall in year one, to show how much the early years matter.
The defaults describe a typical single homeowner retiring at 67, using Australian government figures wherever one exists. They are illustrations, not recommendations, so replace them with your own numbers. Sources are listed at the end of this page.
At these defaults the rule calls for $600,000, close to the $630,000 ASFA suggests for a comfortable single retirement at 67. A median balance of $204,000 falls about $396,000 short of that, and the 4% withdrawal plus the pension supports about $40,160 a year.
The 4% rule is a good first estimate and a poor final plan. Use it to answer "roughly how much do I need?" and to see how your spending, savings and time interact. Then test it. On Australian history, a rate of 3% to 3.5% gives a bigger margin, while a willingness to cut spending after a bad year, or Age Pension income, can justify more. Whatever rate you start with, review it each year rather than setting a number at 65 and leaving it there.
Twenty-five times the yearly spending your savings have to cover. Withdrawing 4% a year is the same as dividing your savings by 25, so $60,000 of spending implies $1,500,000. Take off income from elsewhere first: if rent or the Age Pension covers $20,000 of that $60,000, your savings only have to fund $40,000, which implies $1,000,000.
As a starting point, yes. As a guarantee, no. A 2014 Finsia report by Michael Drew and Adam Walk tested the rule on Australian returns from 1900 to 2011 and found a 4% withdrawal over 30 years from a 50:50 portfolio carried about a 20% chance of running out. Avoiding every historical failure took a rate near 3%. The report still treats 4% as a useful baseline, but one that needs adjusting to the person.
No, and this is the most common misreading. The rule sets 4% of your balance in the first year only. After that you take the same dollar amount raised by inflation, whatever the market did. Taking 4% of the current balance each year is a different strategy: it can never run out, but your income moves up and down with the market.
They measure different things. An account-based pension must pay at least a set percentage of the balance each year: 4% under 65, 5% from 65 to 74, 6% from 75 to 79, and rising from there. From 65, the legal minimum is therefore above 4%. If you need less than the minimum, you can reinvest the excess outside super, although its earnings may then be taxable. Minimum drawdowns were not designed as a safe spending rate.
It can change it a lot, which is why the calculator has an other income field. The Age Pension is available from age 67, subject to residence rules and to income and assets tests. Super counts towards those tests, and your family home does not, although homeowner status changes the thresholds. As your savings run down, a part pension may grow, so the pension acts as a partial floor the original rule never considered.
It is more of a stretch. The rule was built for a 30-year retirement, and a 50-year-old may need 40 years or more. Super is also generally preserved until 60, so the early years have to be funded from outside it. Set the years in retirement to your real horizon and try a rate of 3% to 3.5% to see the difference.
Figures were checked in November 2026 and will change over time.
This page is general information only. It is not personal financial advice and does not take into account your objectives, financial situation or needs. Levio is a finance broker, not a financial adviser, and nothing here recommends a withdrawal rate, investment or product. Results are illustrations based on the assumptions shown, and your actual outcome will differ. Past returns are not a reliable indicator of future returns. Speak with a licensed financial adviser before making decisions about your super, investments or retirement income.
The 4% rule only counts your savings, but many Australians retire with far more in the house than in super. Drawing on home equity has real costs and compounds against you, so it is worth understanding how it works before you need it.
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