← Guides · November 8, 2026
The 4% Rule vs 3%: What a Safer Withdrawal Rate Costs You
The withdrawal rate sets your target: yearly spending ÷ rate. With $40,000 of spending, $50,000 invested, $24,000 saved a year and a 5% real return:
| Withdrawal rate | Portfolio needed | Years to FIRE |
|---|---|---|
| 3% | $1,333,333 | 24.7 |
| 3.5% | $1,142,857 | 22.5 |
| 4% | $1,000,000 | 20.6 |
| 4.5% | $888,889 | 19.1 |
| 5% | $800,000 | 17.8 |
How to read it
Moving from 4% to 3% adds roughly four years and $333,000 to the target. That is the price of a larger safety margin.
The 4% rule comes from historical US data over 30-year windows. If you plan to retire in your 40s, your portfolio has to last longer, so many people choose 3.25% to 3.5%. If you expect other income later, such as a pension, a higher rate may be reasonable early on.
There is no single right answer, which is why it helps to see the whole table. Compare them in the calculator.