Safe Withdrawal Rate
Also called: 4% rule, sustainable withdrawal rate, SWR
A safe withdrawal rate is the percentage of a portfolio you can spend in year one, adjusted for inflation thereafter, without running out. The 4% rule comes from US historical data over 30-year retirements and is a starting point, not a law: it assumes a specific asset mix, ignores fees and taxes, and a longer retirement or a poor first decade demands less. Flexible spending rules outperform any fixed number.
Formula
Portfolio needed ≈ Annual spending × 25 (at a 4% rate)