what history actually did

The 4% rule was tested on thirty years. Retire at 50 and you might need fifty.

Take $1M, spend $40,000 a year rising with inflation, three quarters in stocks. Over thirty years that survived 97% of start years since 1871. Over fifty years, 80%.

You asked for the link. It is below: the slides from the post, the move if there is one, and the planner the chart came from.

Slide 1 of 6: The 4% rule was tested on thirty years. Retire at 50 and you might need fifty.

Slide 2 of 6: Fifty years at 4%: twenty-one start years out of 106 ran out.

Slide 4 of 6: Half a percent less, and seventeen of the failures disappear.

Slide 5 of 6: The rule is fine. The horizon it was tested on is the part people skip.

Slide 6 of 6: Save this for the day someone tells you 4% is safe.

Where to go next

Retire Plan

Type in one paycheck and it runs your plan through every year of market history since 1871, with the taxes worked out. About three minutes, in the browser.

Open it

Sources: Shiller monthly series 1871-2026, start years 1871 to 1976. No tax, no Social Security. Bengen 1994; Cooley, Hubbard and Walz 1998.; Engine output. The thirty-year figure matches the Trinity study's 98% for its 1926 to 1995 sample; ours starts in 1871, which adds harder decades.; Same data and setup. 3.5% of $1M is $35,000 in year one..

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