Does the 4% Rule
Work for YOU?

Where Did the 4% Rule Come From?

The 4% rule comes from the 1998 Trinity Study by three Trinity University professors. They analysed historical US stock and bond returns from 1926 to 1995 and found that a 4% initial withdrawal rate, adjusted annually for inflation, survived 95%+ of 30-year retirement periods.

It became the foundational rule of retirement planning and the FIRE movement. But it has important limitations that a Monte Carlo simulation reveals:

• Tested only on US markets — other countries have different return profiles
• Designed for 30-year retirements — early retirees need 40–60 years
• The 5% failure rate still means 1 in 20 people run out of money
• Low-return environments (like 2000–2020 globally) may require lower rates

Beyond the 4% Rule: Full Probability Analysis

Monte Carlo simulation goes far beyond the Trinity Study. Instead of analysing only historical sequences, it generates 1,000,000 mathematically possible market environments — including scenarios that have never occurred in history.