How much can I safely spend in retirement? Finding your own number instead of 4%
"How much can I spend?" is the question every retirement plan exists to answer, and the most common answer is a rule of thumb: 4% of your savings. The rule has a real pedigree, but it was built for a particular portfolio, a particular horizon and no other income. Runway's Your Best Plan page instead searches for the highest spending that still meets a success target for your accounts and your Social Security. Here's how the two answers compare on one household.
Where does the 4% rule come from?
In 1994 William Bengen tested historical returns for a portfolio of stocks and intermediate-term Treasuries and concluded that, "assuming a minimum requirement of 30 years of portfolio longevity, a first-year withdrawal of 4 percent, followed by inflation-adjusted withdrawals in subsequent years, should be safe" (Journal of Financial Planning). The Trinity study (Cooley, Hubbard and Walz, 1998) reached similar conclusions. Both model a portfolio funding withdrawals on its own, with fixed inflation-adjusted spending. Our 4% rule guide goes through what the research does and doesn't say.
How does Runway find a sustainable number?
Runway runs a Monte Carlo simulation of your plan at a trial spending level, checks the chance your money lasts to your plan-through age, and searches (by bisection) for the highest spending that still meets the target. The default target is 90%, which you can think of as "accept a one-in-ten chance of falling short." The result already reflects your actual accounts, your Social Security claiming ages, your taxes and your healthcare costs. For the sample couple (Pat 65 and Alex 64, $1,460,000 across cash, brokerage, traditional IRAs and a Roth IRA):
Sustainable spending at a 90% target
| Highest yearly spending found | $106,934 |
| Chance money lasts to 95 at that spending | 92.2% |
| 4% of $1,460,000 | $58,400 |
| Chance money lasts at $58,400 | 100.0% |
Here's how quickly the odds fall as spending rises (same household, 2,000 simulated markets):
| Yearly spending | Chance the money lasts to 95 |
|---|---|
| $95,000 | 99.5% |
| $110,000 | 87.0% |
| $120,000 | 67.3% |
| $135,000 | 32.3% |
The curve is steep: going from $95,000 to $120,000 takes the plan from nearly certain to a two-in-three chance. That's why a precise answer matters, and why you should treat any single number as the middle of a range.
Why is Runway's number so much higher than 4%?
- Social Security does part of the work. This couple claims at 69 and 68, so the portfolio funds the early years and Social Security covers a large part of spending afterward. The 4% rule assumes the portfolio pays for all thirty years. See when to claim.
- A 90% target is not "never ran out in history." Bengen's 4% was the rate that survived every historical start; a 90% target deliberately accepts some risk.
- What the number includes differs. Runway's spending figure covers everyday living; health insurance and taxes are calculated and added on top. At $106,934 of spending, the plan's first-year total withdrawal is $112,952, or 7.7% of the $1,460,000 — high next to 4%, but it falls as Social Security starts.
That first-year 7.7% is also a warning: a plan that starts high is exposed to a bad first decade (see why those years matter). Spending rules that adjust, like guardrails, are the usual way to start higher safely.
How do I use this in Runway?
- Build your plan with your real accounts and ages (step-by-step tutorial).
- Open Your Best Plan (Pro) and choose Maximize sustainable spending. Runway searches and shows your number next to your current spending; one click applies it. Free accounts see a rounded preview.
- Pressure-test the result on the Stress Test, Market Crash Test and Historical Backtest pages before you rely on it.
Find your own number. Enter your accounts and Runway searches for the spending your plan can sustain — free to start, no credit card required.
Try the plannerHow were these numbers computed?
The sample household has $40,000 in cash, $350,000 in a taxable brokerage account ($210,000 basis), $950,000 in traditional IRAs, and $120,000 in a Roth IRA; married filing jointly; default market assumptions; plan through age 95; Social Security claimed at 69 and 68. Sustainable spending is the engine's search for the highest annual spending whose 2,000-path Monte Carlo success probability (fixed seed 2026) is at least 90%; it stopped at $106,934 with 92.2% at that level. The Monte Carlo runs leave out the optional long-term-care cost, and all amounts are in today's dollars. The 4% figure is simply 4% of total savings, with the simulation's result at that spending shown for comparison.