FIRE calculator: the 4% rule, what Bengen and the Trinity study actually found, and what the rule assumes about you

Every FIRE calculator on the internet rests on one number: the withdrawal rate. Divide the spending you want by that rate and you have the target; 4% makes it 25 times spending. The rate is usually quoted as if it were a law of nature. It is the finding of two papers from the 1990s, each with stated limits, and the limits are what matter for your own plan.

Bengen 1994: the paper that started it

William P. Bengen's "Determining Withdrawal Rates Using Historical Data" appeared in the October 1994 issue of the Journal of Financial Planning (source 1). He took a retiree who starts on 1 January of each year from 1926 onward, holds a portfolio of 50% common stocks and 50% intermediate-term Treasury notes (his illustrative allocation), withdraws a fixed percentage in the first year and then the same amount adjusted for inflation every year after, and asked how many years the money lasted in each starting year.

His conclusion, in his own words: "Assuming a minimum requirement of 30 years of portfolio longevity, a first-year withdrawal of 4 percent, followed by inflation-adjusted withdrawals in subsequent years, should be safe. In no past case has it caused a portfolio to be exhausted before 33 years, and in most cases it will lead to portfolio lives of 50 years or longer." He also reported that "a 4.25-percent first-year withdrawal could exhaust a portfolio in as little as 28 years, were past conditions to repeat themselves", called an initial 5% "risky" and 6% or more "gambling", and advised a stock allocation "as close to 75 percent as possible, and in no cases less than 50 percent" (source 1).

Three assumptions travel with that result: US market history, a 50% to 75% stock portfolio, and a 30-year horizon.

The Trinity study 1998: the same question with success rates

Philip L. Cooley, Carl M. Hubbard and Daniel T. Walz, professors at Trinity University, published "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable" in the AAII Journal in February 1998 (source 2). They used annual returns from 1926 to 1995, five portfolio mixes from all stocks to all bonds (the S&P 500 for stocks, long-term high-grade corporates for bonds), payout periods of 15 to 30 years and withdrawal rates from 3% to 12%, and reported the share of past periods in which the portfolio survived.

For an inflation-adjusted 4% withdrawal over 30 years, their Table 1 gives success rates of 98% for 100% stocks, 100% for 75/25, 100% for 50/50 and 100% for 25/75 (source 2). The authors summarise: "If history is any guide for the future, then withdrawal rates of 3% and 4% are extremely unlikely to exhaust any portfolio of stocks and bonds during any of the payout periods shown." The paper is explicit that it "did not adjust for taxes or transaction costs", and that only 41 overlapping 30-year periods exist in the data, so the sample is small and heavily overlapping.

What any FIRE calculator therefore assumes

• Real returns, not nominal. Both papers adjust withdrawals for inflation, so the whole exercise is in today's money. A calculator that takes a 7% nominal return and 4% withdrawals without an inflation line is mixing units. The Bindler planner's Guide gives the rule of thumb that a 7% nominal return with 3% inflation is about 4% real (source 3).
• A single average return. A spreadsheet applies one real return every year. Markets do not, and the order of good and bad years (sequence-of-returns risk) is exactly what the two papers measured and a deterministic planner cannot. The planner says so on its Guide sheet.
• Nothing outside the portfolio. No tax, no state or workplace pension, no house sale, no part-time income. Each of those changes the answer, usually for the better.
• A horizon. 4% was tested for 30 years. Longer horizons argue for a lower rate or a plan that adapts.

The sample case

The free calculator and the workbook share one illustrative saver: age 30, 45,000 saved, 18,000 a year added and growing 1% a year in real terms, a 5% real return while saving, 40,000 a year of retirement spending, a 4% withdrawal rate to set the target, a 3% real return once retired, and a plan to age 100. Both schedules were recalculated with a formula engine and matched to an independent Python replica before listing (source 3).

• The target is 1,000,000 in today's money, 25 years of spending.
• It is reached at age 54, 24 years from now, with 1,047,042 in the account after 485,522 of contributions.
• Drawing 40,000 a year at a 3% real return, the balance at 100 is 102,413. The money lasts to the plan age.

Two things to notice. Contributions are less than half the target; growth does the rest, which is why the real return input moves the retirement age more than any other. And the drawdown ends with 102,413 rather than zero or a million: at a 3% real return, 4% withdrawals draw the capital down slowly rather than living off growth, and a lower real return in retirement is the input that turns "lasts to 100" into a run-out age.

Run your own numbers

The free FIRE calculator takes the nine inputs above and returns the target, the age you reach it and whether it lasts, in your browser with no sign-up.

The Retirement and FIRE Planner workbook shows the years: a 70-year Accumulation sheet, a 75-year Drawdown sheet, a Summary with the target, the age reached, years from now, the balance then, the balance at the plan age, years of spending covered and total contributed, and a Guide. Everything in today's money. Live formulas, no macros, no locked cells, Excel and Google Sheets. $12, one price.

Tax, pensions, sequence-of-returns risk and market crashes are outside the workbook, and its Guide says so plainly. Arithmetic on your assumptions, not financial advice.

Sources

1. William P. Bengen, "Determining Withdrawal Rates Using Historical Data", Journal of Financial Planning, October 1994; reprinted by the Financial Planning Association, March 2004: https://www.financialplanningassociation.org/sites/default/files/2021-04/MAR04%20Determining%20Withdrawal%20Rates%20Using%20Historical%20Data.pdf

2. Philip L. Cooley, Carl M. Hubbard and Daniel T. Walz, "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable", AAII Journal, February 1998: https://www.aaii.com/files/pdf/6794_retirement-savings-choosing-a-withdrawal-rate-that-is-sustainable.pdf

3. Bindler, Retirement and FIRE Planner specification, Guide sheet and verification log (products/fire-planner/spec.json, build.py and verify.py), figures as listed 27 September 2026.

Last checked against the sources on 28 September 2026.