4% Rule Calculator: Find Your FIRE Number
Use the 4% rule to find the exact portfolio you need to retire safely — or see how much you can withdraw each year from your current savings. Two-way calculator with inflation adjustment, built for both US and Canadian investors.
| Year | Portfolio (start) | Withdrawal | Growth | Portfolio (end) |
|---|
What Is the 4% Rule?
The 4% rule is the most widely used retirement withdrawal guideline in personal finance. It comes from the Trinity Study (1998), a landmark analysis by three professors at Trinity University who backtested stock and bond portfolio performance from 1926 to 1995. Their finding: a retiree who withdraws 4% of their initial portfolio in year one — and adjusts that amount for inflation each subsequent year — has a near-100% chance of their money lasting a full 30-year retirement with a balanced 50/50 stock-bond portfolio.
In the FIRE (Financial Independence, Retire Early) community, the 4% rule is used to calculate your FIRE number — the total portfolio you need to retire permanently. At a 4% withdrawal rate, this equals exactly 25 times your annual spending, known as the Rule of 25.
Example: $60,000 divided by 0.04 = $1,500,000
Example: $1,000,000 x 0.04 = $40,000 per year ($3,333 per month)
What Withdrawal Rate Should You Use?
The standard 4% rate was designed for a 30-year retirement — suitable for someone retiring at 65. If you are pursuing early retirement, your portfolio needs to last longer, which means a lower withdrawal rate is safer. Use this table as a starting point:
| Retirement Length | Retirement Age | Suggested Rate | FIRE Number Multiple | Historical Success |
|---|---|---|---|---|
| 30 years | 65+ | 4.0% | 25x | ~95% |
| 40 years | 55 – 64 | 3.5% | 28.6x | ~90% |
| 50 years | 45 – 54 | 3.25% | 30.8x | ~88% |
| 60 years | Under 45 | 3.0% | 33.3x | ~85% |
The highlighted row is the most commonly used adjustment for FIRE planners retiring in their 50s. Adjust the withdrawal rate slider in the calculator above to see how each rate changes your FIRE number or safe withdrawal amount.
Does the 4% Rule Work in Canada?
The 4% rule was originally derived from US stock and bond market data, but research on Canadian portfolios shows similar conclusions. A diversified Canadian portfolio (TSX plus international equities) has historically supported withdrawal rates in the 3.5% to 4% range over 30-year periods with high success rates.
However, Canadian retirees have two important factors that can reduce how much they need to withdraw from their personal portfolio:
Canada Pension Plan (CPP) and Old Age Security (OAS) are guaranteed monthly income that supplements your portfolio. A Canadian with a full work history can expect $1,200 to $2,000 per month combined from CPP and OAS at age 65. Enter this in the calculator to see how it reduces your FIRE number or increases your total monthly income.
If you hold RRSP funds, they must be converted to a RRIF by age 71. The CRA then sets minimum annual withdrawal percentages starting at 5.28% at age 71 — already above the 4% rule. Those with large RRSPs should plan proactively to avoid OAS clawback, which begins when net income exceeds $93,208 in 2026.
Withdrawals from a TFSA do not count as income and do not affect your OAS clawback threshold. Prioritizing TFSA withdrawals in early retirement — before RRIF minimum withdrawals begin — is often the most tax-efficient strategy for Canadian retirees.
Frequently Asked Questions
The 4% rule states that you can withdraw 4% of your total portfolio in your first year of retirement, then increase that dollar amount by inflation each subsequent year, and have a near-100% chance of your money lasting 30 years. It was established by the Trinity Study (1998), which backtested US market returns from 1926 to 1995. The rule gives rise to the FIRE Number: 25 times your annual spending (since 100 divided by 4 equals 25).
Divide your expected annual retirement spending by 0.04 (4%). If you plan to spend $60,000 per year, your FIRE number is $1,500,000. If you receive government benefits such as CPP, OAS, or Social Security, subtract that annual income from your spending first — only the portion your portfolio must cover determines your FIRE number. Use the calculator above with your exact numbers for a personalized result.
Yes, for traditional 30-year retirements the 4% rule remains broadly supported. Morningstar’s 2026 retirement income research suggests 3.9% for a 30-year horizon at 90% confidence — close to the original 4%. However, with current high stock valuations (CAPE ratio above 30), some financial planners recommend a slightly conservative 3.5% for new retirees, particularly those retiring before 60 who face longer withdrawal periods. The 4% rule is best understood as a starting guideline, not a guarantee.
Yes. Research on Canadian portfolios shows that 3.5% to 4% is a sustainable withdrawal rate for 30-year retirements with a diversified stock and bond allocation. Canadian retirees also benefit from CPP and OAS, which reduce the amount their personal portfolio needs to generate. The main Canadian-specific consideration is the RRIF mandatory withdrawal rule at age 71, which may force withdrawals above 4% — though this is typically only an issue for those with very large RRSP balances who do not need the income.
For Canadian FIRE planners retiring before 55 with a 40-50 year retirement horizon, most research supports a withdrawal rate of 3.25% to 3.5%. At 3.5%, your FIRE number becomes 28.6 times your annual spending. CPP and OAS (typically beginning at 65) create a natural income floor that reduces the pressure on your portfolio in later years — meaning your early years of retirement carry the most portfolio risk, not the final years.
CPP and OAS reduce how much your portfolio needs to generate in retirement. If you plan to spend $70,000 per year and expect $18,000 annually from CPP and OAS, your portfolio only needs to cover $52,000. At a 4% withdrawal rate, this reduces your FIRE number from $1,750,000 to $1,300,000 — a difference of $450,000. Enter your combined monthly CPP plus OAS estimate in the calculator after selecting Canada mode to see the impact on your specific situation.
The Rule of 25 is simply a shortcut version of the 4% rule. Since 100 divided by 4 equals 25, your FIRE number is 25 times your annual retirement spending. For example, $60,000 in annual spending times 25 equals a $1,500,000 FIRE number. If you use a more conservative 3.5% withdrawal rate, the equivalent multiplier becomes approximately 28.6 times annual spending.