Every FIRE number in our planning guide relies on one number: the 4% withdrawal rate. It's cited so often it can start to feel like a rule of thumb someone made up. It isn't — it comes from real, specific research, and understanding what that research actually tested (and didn't test) makes it a far more useful tool.
This post is part of our FIRE planning guide — this is the deep dive on where the 4% number comes from.
Financial planner William Bengen first published the concept in 1994, analyzing historical U.S. market returns from 1926 to 1992. He tested different withdrawal rates against real historical market cycles — including the Great Depression — to find the highest rate that would have let a portfolio last at least 30 years across nearly every historical starting point.
Four years later, three professors at Trinity University — Philip Cooley, Carl Hubbard, and Daniel Walz — expanded on Bengen's work in a 1998 study using data from 1925 to 1995. That's why the whole body of research is commonly nicknamed the Trinity Study, even though Bengen did the original analysis first. The Trinity Study tested withdrawal rates from 3% to 12% across different stock-and-bond portfolio mixes, over both 15- and 30-year periods.
Both studies found that a 4% starting withdrawal rate — adjusted upward each year for inflation — sustained a portfolio through roughly 95-96% of the historical 30-year periods tested. That framing hides an important detail: "success" in this research means the money lasted the full 30 years, even if the ending balance was close to zero. It's a measure of whether your spending was sustained, not whether your wealth grew or was preserved.
4% remains the most commonly cited starting point, and it's a reasonable one for a traditional-length retirement with a stock-heavy portfolio. But for FIRE specifically — where the withdrawal period might stretch to 40, 50, or more years instead of 30 — some planners use 3% to 3.5% instead, trading a smaller safe withdrawal amount for a larger safety margin against a much longer horizon than the original research tested.
See your own FI number at whatever withdrawal rate you choose
Try the Financial Independence Calculator →Financial planner William Bengen first published the concept in 1994, analyzing historical U.S. market data from 1926-1992. Three professors at Trinity University — Cooley, Hubbard, and Walz — expanded on his work in a 1998 study using data from 1925-1995, which is why it's commonly called the Trinity Study.
It means that across the historical 30-year periods tested, a 4% withdrawal rate (adjusted for inflation each year) would have sustained the portfolio in roughly 95-96% of those periods. It's a backtest against past market history, not a guarantee about future returns.
No — success in the original study just means the money lasted the full 30 years, even if the ending balance was close to zero. It measures whether your spending was sustained, not whether your wealth was preserved or grown.
Yes — the roughly 95% success rate depends on holding a meaningful stock allocation, generally at least 50%. Portfolios with heavier bond allocations had lower success rates at the same 4% withdrawal rate in the original research.
No. It's based entirely on historical U.S. market data, and past performance doesn't guarantee future results. Some planners now recommend 3-3.5% for extra safety margin, particularly for retirements expected to last longer than the original 30-year study window, like early retirement under FIRE.