4% rule
A historical rule of thumb often used to illustrate an initial 4% portfolio withdrawal, then adjusted for inflation.
Definition
A historical rule of thumb often used to illustrate an initial 4% portfolio withdrawal, then adjusted for inflation.
Why this concept matters
It provides an educational starting point for thinking about long-term withdrawals.
What to watch
It is neither universal nor guaranteed; country, tax, fees, allocation, duration and markets change the outcome.
Simple example
The rule would imply an indicative initial withdrawal of €20,000 from €500,000.
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