The 4% Rule: Does It Still Work in 2026?

The 4% rule states that you can withdraw 4% of your retirement portfolio in year one, then adjust for inflation each year, with a high probability of not running out of money over a 30-year retirement.

Based on historical stock and bond returns, a 4% withdrawal rate has succeeded in 95%+ of 30-year periods.

However, today's lower expected returns and longer retirements have led many financial planners to recommend 3–3.5% as a safer rate. The rule is a starting point, not a guarantee — flexibility to reduce withdrawals in down markets significantly improves outcomes..