4% Rule Retirement Calculator

How the 4% Rule Calculator works

The 4% rule is a retirement rule of thumb: if you withdraw 4% of your portfolio in your first year of retirement, then adjust that dollar amount upward for inflation every year after, historical US market returns suggest a low risk of running out of money over a roughly 30-year retirement. This calculator uses the rule to work out both how big a portfolio you need, and whether your current savings trajectory gets you there.

It is useful for a first pass on coast FIRE, barista FIRE, or the “can I quit” question, but it is not a full Singapore retirement model. Use it alongside CPF Projection if CPF LIFE will be part of your plan.

Required nest egg and projected nest egg

Your required nest egg is simply your annual retirement expenses divided by your chosen withdrawal rate. For example, $48,000 of annual expenses at a 4% withdrawal rate implies a target of $1,200,000. Separately, the calculator projects your nest egg at retirement by compounding your current savings and monthly contributions forward, month by month, at your expected annual return (a default of 6% a year, compounded monthly) from your current age to your chosen retirement age. If the projected nest egg falls short of the required nest egg, the calculator flags the gap as a shortfall and estimates how much extra you’d need to save each month, using the standard future-value-of-an-annuity formula, to close it by retirement.

First-year withdrawal and the year-by-year projection

Your first-year withdrawal is your projected nest egg at retirement multiplied by the withdrawal rate. From there, the calculator simulates your portfolio year by year through retirement (30 years by default): each year it subtracts that year’s withdrawal, adds investment returns calculated on the average balance during the year, and then increases next year’s withdrawal by your assumed inflation rate (3% by default) so your spending power stays constant in real terms. If the balance is ever driven to zero, the calculator records that as the depletion year and marks the plan as unsustainable; otherwise it reports the final balance remaining at the end of your retirement horizon. The calculator also reports your real return, your expected return net of inflation, as a quick gauge of how much your portfolio is actually growing in purchasing-power terms.

Assumptions and limits

This is a generic model, not a Singapore-specific one: it doesn’t account for CPF LIFE payouts, CPF interest, or other local retirement income sources. It also assumes constant expected returns and inflation every year, rather than the sequence-of-returns risk (bad returns early in retirement) that real portfolios face. If you plan to retire well before the traditional age and need your money to last 40 years or more, many planners recommend a more conservative withdrawal rate of 3 to 3.5% rather than the traditional 4%.

This tool provides educational estimates only, not licensed financial advice. Actual investment returns, inflation, and retirement spending needs vary, and this calculator cannot guarantee any specific outcome. Consult a licensed financial adviser for personalized retirement planning.