The 4% rule calculator
The rule says the target is 25 times a year's spending. This follows the balance year by year with inflation applied, to see whether it really lasts.
A rule of thumb: withdraw 4% of your savings a year and they should last thirty years. Turned around, the target becomes 25 times a year's spending. The target itself is one division, but that alone does not tell you whether it holds — so this raises the withdrawal by inflation each year and follows the balance down.
Your numbers
What you enter is saved in this browser, so it is still here next time
4% is the figure the rule is named after
Zero means it starts straight away
Under the 4% rule
25× a year's costs — what you need
₩900,000,000
Still short by
- Already saved
- ₩300,000,000
- Still to save
- ₩600,000,000
What your assets support
₩1,000,000 a month
- What you want to spend
- ₩3,000,000 a month
The target is annual living costs divided by the withdrawal rate. The table withdraws your entered living costs at the start of each year, then applies the return to the remaining assets. Changing only the withdrawal rate changes the target, not spending in this table. Once depleted, assets stay at zero and unfunded costs appear separately. Living costs and pension rise with the same inflation rate; pension above living costs is not reinvested.
On these terms the money runs out in year 10. Compare different living costs, starting assets, and pension amounts.
Withdrawn and left, year by year
| Year | Taken from assets | Pension | Unfunded living costs | Assets left |
|---|---|---|---|---|
| Year 1 | ₩36M | — | — | ₩277.2M |
| Year 2 | ₩36.9M | — | — | ₩252.3M |
| Year 3 | ₩37.8M | — | — | ₩225.2M |
| Year 4 | ₩38.8M | — | — | ₩195.8M |
| Year 5 | ₩39.7M | — | — | ₩163.8M |
| Year 6 | ₩40.7M | — | — | ₩129.3M |
| Year 7 | ₩41.7M | — | — | ₩91.9M |
| Year 8 | ₩42.8M | — | — | ₩51.5M |
| Year 9 | ₩43.9M | — | — | ₩8.1M |
| Year 10 | ₩8.1M | — | ₩36.9M | ₩0 |
| Year 11 | ₩0 | — | ₩46.1M | ₩0 |
| Year 12 | ₩0 | — | ₩47.2M | ₩0 |
| Year 13 | ₩0 | — | ₩48.4M | ₩0 |
| Year 14 | ₩0 | — | ₩49.6M | ₩0 |
| Year 15 | ₩0 | — | ₩50.9M | ₩0 |
| Year 16 | ₩0 | — | ₩52.1M | ₩0 |
| Year 17 | ₩0 | — | ₩53.4M | ₩0 |
| Year 18 | ₩0 | — | ₩54.8M | ₩0 |
| Year 19 | ₩0 | — | ₩56.1M | ₩0 |
| Year 20 | ₩0 | — | ₩57.6M | ₩0 |
| Year 21 | ₩0 | — | ₩59M | ₩0 |
| Year 22 | ₩0 | — | ₩60.5M | ₩0 |
| Year 23 | ₩0 | — | ₩62M | ₩0 |
| Year 24 | ₩0 | — | ₩63.5M | ₩0 |
| Year 25 | ₩0 | — | ₩65.1M | ₩0 |
| Year 26 | ₩0 | — | ₩66.7M | ₩0 |
| Year 27 | ₩0 | — | ₩68.4M | ₩0 |
| Year 28 | ₩0 | — | ₩70.1M | ₩0 |
| Year 29 | ₩0 | — | ₩71.9M | ₩0 |
| Year 30 | ₩0 | — | ₩73.7M | ₩0 |
The 4% rule comes from the 1998 Trinity study in the United States, which ran 30-year withdrawals against US stock and bond returns from 1926 to 1995. Tax and fees are not deducted, and it does not transfer to Korean conditions unchanged — try different withdrawal rates. The calculation also assumes the same return every year, so a sharp fall early in retirement would empty the pot faster than shown.
Make a link with these numbers
Opening the link fills this screen with the same values. Useful for going through it with a partner, or for comparing two sets of conditions.
Common questions
QWhere does the 4% rule come from?
A 1998 study at Trinity University in the United States. Running thirty-year withdrawals against actual US stock and bond returns from 1926 to 1995, a 4% withdrawal survived in most equity-heavy mixes. It is US data, it assumes thirty years, and it is before tax and fees.
QDoes it carry over to Korea?
Not directly. The market is different, retirement can run longer than thirty years, and health insurance and the tax structure differ too. That is why the withdrawal rate is editable here. Lowering it to 3% raises the target to 33 times a year's spending.
QWhat if the market falls sharply early in retirement?
This calculation assumes the same return every year. In reality an early fall hurts far more — spending out of a portfolio that has already dropped leaves less capital to recover with. The same average return can end very differently depending on the order the years arrive in.