4% Rule Withdrawal Calculator
Key Takeaway
The 4% safe withdrawal rate (SWR) means withdrawing 4% of your retirement corpus annually. A ₹2 crore corpus sustains ₹8 lakh/year (₹66,667/month) for 30+ years with inflation adjustments.
4,00,000
2,33,25,263
4% Rule Withdrawal Nest Egg Simulation
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4% Safe Withdrawal Rate Rule
Trinity Study baseline model where subsequent years are adjusted upward by inflation.
Worked Example: ₹2 Crore Corpus
The 4% Rule: The 1998 Study That Still Dictates How the World Retires
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.
Frequently Asked Questions
Does the 4% rule work in India?
The 4% rule was designed for US markets with 3% inflation and moderate volatility. India has 6% inflation and higher volatility. Many Indian financial planners recommend a 3–3.5% withdrawal rate for added safety, especially for early retirees with 30+ year horizons.
What is the 4% rule adjusted for inflation?
In Year 1, you withdraw 4% of your initial corpus. In subsequent years, you increase the withdrawal by the inflation rate,not 4% of the current portfolio value. This means your actual withdrawal percentage varies based on portfolio performance.
What portfolio allocation does the 4% rule assume?
The original Trinity Study tested portfolios with 50–75% stocks and 25–50% bonds. A 60/40 equity-debt split showed a 95%+ success rate over 30 years. For Indian portfolios, consider a 50% equity, 30% debt, 20% gold/cash allocation.
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