| Spending | 3% | 3.5% | 4% | 4.5% | 5% |
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Your target nest egg is the portfolio that, at your withdrawal rate, generates enough to cover spending not already covered by guaranteed income (Social Security + pension). Formula: (annual spending − SS − pension) ÷ withdrawal rate.
The 4% rule comes from the Bengen study (1994) and Trinity Study — tested on historical 50/50 stock/bond portfolios over 25–30 year periods. Treat this target as a starting point, not a guarantee.
Educational purposes only. This calculator illustrates mathematical concepts related to long-term investing and is not financial advice. Past market returns do not guarantee future results. Portfolios can lose value. The formulas assume constant returns and do not account for taxes, fees, inflation, or sequence-of-returns risk. Consult a qualified financial professional before making investment decisions.