compoundsim4% Rule Withdrawal Simulator
Spend a portfolio down by a share a year, raised with inflation, and see how often the money lasts on real monthly returns.
How the withdrawal simulation works
What the 4% rule says
The 4% rule comes from US studies in the 1990s: withdrawing 4% of a stock and bond portfolio in the first year of retirement, then raising that amount with inflation every year, lasted 30 years in almost every historical period. This page tests that rule, or any other rate, on the mix and history you choose.
How each path is simulated
Each of the 1,000 paths comes from the same two-regime model as the portfolio page, fitted to the shared history of the assets you hold. At the start of every month a twelfth of the yearly withdrawal comes out, raised with the inflation rate you set, and the rest grows with that month's return. A path counts as a failure from the first month its balance reaches zero.
Reading the success rate
The success rate is the share of paths that still had money at the end. A rate that succeeds 95% of the time still fails in one path in twenty, mostly when a crash comes early in retirement; why the timing matters so much is explained in the related article below.
What is not included
Taxes, fund fees, trading costs and pensions are left out, and the withdrawal never changes with markets. Spending less after bad years, or adding a pension, makes money last longer than shown; living costs that rise faster than the inflation rate set make it run out sooner.