4% Withdrawal Rule
Based on the Trinity Study, if your retirement assets equal 25× your annual expense (4% withdrawal), you have a 95% historical success rate over 30 years. This tool computes the target assets, the supportable expense at a given asset level, and scenarios from 3% to 4.5%.
Assumptions
- Based on 1926–1995 US stock/bond historical data (Trinity Study)
- Balanced 50/50 to 75/25 stock/bond portfolio
- 30-year horizon (early retirees with 40+ years need to adjust)
- Inflation-adjusted annual withdrawal
See Trinity Study article for background and Taiwan-specific adjustments.
Frequently asked
- Does the 4% rule apply in Taiwan?
- The Trinity Study used US stock/bond data from 1926-1995. If your portfolio holds global equities (VT, VTI, or 0050 + BND), the rule roughly transfers. Concentrated single-market or single-stock portfolios show materially worse historical outcomes. Treat 4% as a ceiling and keep a 0.5-1% safety margin.
- Why 25× annual expense?
- 1 / 4% = 25. Multiplying expense by 25 is mathematically identical to a 4% withdrawal rate. NT$600K annual expense → NT$15M target.
- What are the assumptions and limits?
- 30-year horizon (early retirees with 40-50 years need to lower the rate); 50/50 to 75/25 stock/bond mix; withdrawals adjusted yearly for inflation. The biggest risk is a steep drawdown in years 1-5 of retirement (sequence of returns risk).
- What rate should I use for early retirement?
- The longer the horizon, the lower the safe withdrawal rate. Studies suggest 3.0-3.5% for a 40-50 year horizon (FIRE at 50), ~3.5% at age 55, and 4% only at 60+ where Trinity's original assumptions hold.
- How do I survive a market crash early in retirement?
- Common defenses: (1) hold 2-3 years of expenses in cash or short bonds at retirement entry; (2) use a flexible rule (cut spending 5-10% in bad years); (3) keep working 1-2 years past 25× to build a cushion before quitting.
- Does this tool store my inputs?
- No. All calculations run in your browser. Nothing is sent to a server.