The 4% Rule Explained
The Safe Withdrawal Rate (SWR) theory, popularized by the Trinity Study, suggests that if you withdraw 4% of your starting portfolio value annually (adjusted for inflation), your money should last for at least 30 years across almost all historical stock market scenarios.
Intelligence Insight: If you plan to retire extremely early (e.g., in your 30s or 40s), many financial advisors suggest dropping your Safe Withdrawal Rate to 3.25% or 3.5% to account for a 50+ year retirement timeline and Sequence of Returns Risk.