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Glossary term

4% Rule

Safe withdrawal rate in retirement

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Definition

What is 4% Rule?

The 4% rule, from the 1998 Trinity Study, says that withdrawing 4% of your portfolio in year one and adjusting that amount for inflation every year after has historically lasted 30+ years in a 60/40 stock-bond portfolio. Recent research suggests 3.3% to 3.5% is safer for 40+ year horizons.

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