What is the 4% Rule?

The 4% rule is a retirement withdrawal guideline: in the first year of retirement, withdraw 4% of your corpus; in later years, increase that amount by inflation. The idea is that with a balanced portfolio, the corpus has a high chance of lasting 30+ years.

How the 4% rule works

If you have ₹1 crore at retirement, 4% = ₹4 lakh in year one. Next year you might withdraw ₹4 lakh × (1 + inflation). So your “monthly pension” in the first year is 4% ÷ 12 of the initial corpus.

Is 4% safe for India?

The original rule was based on US data. India has higher inflation (6–7%) and different market volatility. Many planners use 3–3.5% as a safer withdrawal rate here, which aligns with the 33X–40X corpus rule (1 ÷ 33 ≈ 3%).

Check sustainability

A retirement planner that shows post-retirement depletion (how long your corpus lasts under different withdrawal rates) is more reliable than a single rule. Use it to see if 4% or a lower rate fits your situation.