4% Rule Withdrawal Calculator

In 1998, three professors at Trinity University in San Antonio, Texas, published a study that would change retirement planning forever. They asked a deceptively simple question: If a retiree withdraws a fixed percentage of their portfolio in Year 1, increases it by inflation each year, and holds a mix of stocks and bonds — what's the maximum withdrawal rate that keeps the money alive for 30 years?

After backtesting against every 30-year period in US market history — including the Great Depression, the 1970s stagflation, and the dot-com crash — they found the answer: 4%. A retiree with a 50–75% equity allocation who withdrew 4% in Year 1 and adjusted for inflation thereafter had a 95%+ chance of not running out of money.

Here's how it works in Indian numbers. If your retirement corpus is ₹3 Crores, the 4% rule says withdraw ₹12 Lakhs in Year 1 (₹1 Lakh/month). In Year 2, if inflation was 6%, withdraw ₹12.72 Lakhs (₹1.06 Lakhs/month). You always adjust by inflation — not by portfolio performance.

But here's the India caveat. The Trinity Study was built on US markets with 3% inflation and deep, liquid bond markets. India has 6–7% inflation and higher equity volatility. Many Indian financial planners recommend a 3–3.5% withdrawal rate for early retirees with 30+ year horizons. The rule is a brilliant starting point — but stress-test it against Indian inflation before betting your retirement on it.