◈ GLOSSARY · RETIREMENT
4% Rule.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
A retirement-withdrawal heuristic from the 1990s Trinity Study: withdraw 4% of your portfolio in year one, then adjust that dollar amount for inflation each year, and historically a 60/40 portfolio survived 30 years in nearly all scenarios. It's a planning starting point, not a guarantee — high starting valuations, longer retirements, and early bear markets all push the safe number lower (some recent work suggests 3.3–3.7%).
◈ IN PRACTICE
Example
A $1.25 million portfolio supports about $50,000 of inflation-adjusted spending in year one under the 4% rule — combined with $30,000 in Social Security, that's an $80,000 gross retirement budget.