How much do I need to retire? The 4% rule, and when it is not enough
September 7, 2026 · 4 min read
- 4% rule
- fi number
- safe withdrawal rate
- fire
The honest answer is a multiple of what you spend, not a round number somebody else picked. The 4% rule is the shortcut most people use to get there: take a year of spending, multiply by 25, and that is the pile that can pay you 4% a year, adjusted for inflation, with a very good chance of lasting thirty years. Spend $4,000 a month and the rule says $1,200,000.
Where the 4% comes from
It is not a law of nature. It comes from studies that replayed every thirty-year stretch of US market history and asked what starting withdrawal rate survived all of them, including the ones that began right before a crash. Four percent did, for a portfolio of stocks and bonds, over thirty years. That last part is the catch: thirty years is a retirement that starts at 65 and ends at 95. Nothing in the research says 4% survives fifty years.
Why retiring early breaks it
If you stop working at 40, the money has to last fifty or sixty years, not thirty. The longer the horizon, the more chances a bad decade gets to hurt you early, when it does the most damage. So the safe rate falls, and the multiple rises. Reign does not use a flat 25×. It uses 25× for a retirement starting at 65 or later, 27× from 55, 29× from 45, and 31× below that. Those steps follow the extended research on longer horizons rather than a precise formula, and they are deliberately a little conservative: the cost of being wrong here is running out of money at 85.
The practical effect is bigger than it sounds. At $4,000 a month, the number is $1,200,000 for a 65-year-old and $1,488,000 for a 40-year-old. Same spending, $288,000 apart, purely because of how long the money has to work.
The two things the number is not
It is not your net worth. A house you live in does not pay you 4% a year, and money you owe on a car counts against you. The number is compared against what you have invested, after debts. And it is not fixed: the target depends on the age you reach it, so as your projected date moves, so does the number. That is why the calculator below reports the target at the age it says you get there, rather than one figure for all time.
Run your own numbers
This runs the same projection the app does: your invested balance and monthly contributions growing at 6%, checked every month against the horizon-adjusted target, until they cross.
How much do you need?
Four numbers. Nothing is saved. Assumes a 6% annual return, compounded monthly, and a withdrawal rate that drops the earlier you retire.
Your FI number at age 56
$1,296,000
27× a year's spending, a 3.7% withdrawal rate
You reach it at
age 56
22 years from now
A flat 4% rule would say $1,200,000. Retiring at 56 means the money has to last longer than the 30 years that rule was built for, so Reign uses 27× instead — $96,000 more.
What it leaves out is what makes the real answer yours: Social Security, which lowers the number for anyone claiming it; debts, which reduce what is actually invested; and the gap between what you spend now and what you will spend then. Reign's free Snapshot puts those in. The calculator also lives at /tools/fi-number.