The 4% rule (Trinity Study, 1998) states withdrawing 4% of your portfolio in year one, adjusted annually for inflation, sustains a 60/40 portfolio for 30 years in 95% of historical periods.
The 4% rule (Trinity Study, 1998) states withdrawing 4% of your portfolio in year one, adjusted annually for inflation, sustains a 60/40 portfolio for 30 years in 95% of historical periods. Updated analysis with lower projected bond returns suggests 3.0-3.5% may be more appropriate. Morningstar’s 2024 update recommends 3.7% for a 30-year retirement.
The rule also doesn’t account for: sequence of returns risk (early losses are devastating), inflation spikes, or healthcare cost increases above CPI. A flexible withdrawal strategy — reducing withdrawals 10-15% during down markets — increases success rates to 99%.
The PivotReset Decision Support Engine shows you the 12-month financial projection for each path.
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