The 4% rule was built for 30-year retirements. For 40+ years, the research points to 3.25–3.5%. Here is what Bengen, the Trinity Study, and modern analysis found.
William Bengen’s 1994 paper in the Journal of Financial Planning tested withdrawal rates against historical U.S. market data going back to 1926. He found that a 4% initial withdrawal rate, adjusted annually for inflation, survived every 30-year period in the historical record with at least a 50/50 stock-bond portfolio. The Trinity Study (Cooley, Hubbard, and Walz, 1998) extended this analysis and found approximately 95% success across 30-year periods.
The critical constraint: both studies tested 30-year periods. Bengen explicitly noted that longer horizons would require lower rates. This caveat gets lost in popular discussions of the 4% rule, which often present it as universally applicable.
Wade Pfau’s work (2012 and subsequent updates) found that for a 40-year retirement, a 3.5% initial withdrawal rate produces roughly 90% success across historical scenarios. At 4%, the success rate drops to approximately 75–80% for 40-year periods.
Morningstar’s 2024 safe withdrawal rate study recommended a 3.7% starting rate for a 30-year retirement with a 90% success probability. The ERN (Early Retirement Now) safe withdrawal rate series suggests that a 3.25–3.5% rate is appropriate for 50-year retirements targeting high success probabilities, particularly using a 75–100% equity allocation.
The difference between 4% and 3.5% seems small. In portfolio terms, it is not. At $40,000 spending: $1,000,000 at 4% vs $1,143,000 at 3.5% ($143,000 difference). At $60,000: $1,500,000 vs $1,714,000 ($214,000). At $80,000: $2,000,000 vs $2,286,000 ($286,000). At $100,000: $2,500,000 vs $2,857,000 ($357,000).
For most households, the additional $150,000–$350,000 required represents 3–5 extra years of saving. Whether that is worth the added certainty is a personal decision, not a mathematical one.
Sequence of returns risk is the dominant variable. A bad market run in years 1–5 of retirement is far more damaging than the same run in years 20–25. Equity allocation also matters significantly at longer horizons — counterintuitively, higher equity allocations often improve 40-year survival rates because the long time horizon allows recovery from early downturns.
Spending flexibility is the underrated variable. A retiree who can cut spending by 10–20% during market downturns can sustain a higher starting withdrawal rate than the static-spending models suggest. The research on flexible withdrawal strategies consistently shows that even modest flexibility meaningfully improves outcomes.
Given the research, here is a defensible approach for FIRE planning with a 40-year horizon: use 3.5% as your primary planning rate (size portfolio to 28.6× annual spending), run Monte Carlo analysis at your specific equity allocation, plan for spending flexibility, and model Social Security as a backstop.
The 4% rule is a reasonable starting point for planning, not a guarantee. For a 40-year retirement from a zero-flexibility position, 3.5% is more honest.
If you want to turn the ideas in this article into a concrete plan, try these tools: Safe Withdrawal Rate Calculator, or the FIRE Calculator.
Related reading: The 4% Rule Explained, Monte Carlo Simulation for Retirement.
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