Christmas is for family and gratitude—perfect time to answer the #1 question retirees ask: “How much do I really need to retire comfortably?” The 4% Rule is the simplest answer most financial experts use. It’s easy, it’s proven, and it still works in 2026.
At Davenport & Associates, we use it every day to help families like yours feel secure. What is the 4% Rule? It says you can safely withdraw 4% of your savings every year in retirement without running out of money. This article explains it like you’re 5, with real 2026 numbers. Ready to know your number? Read on.
Imagine you have a big cookie jar with $1,000,000. Every year you take out $40,000 (4%). The jar keeps growing because some cookies are still baking (investments earn 7% average). You never run out — even in bad years — because you take only what the jar can handle.
That’s it! The 4% Rule says: Your safe annual withdrawal = 4% of your total retirement savings in year 1 Then increase it a little each year for inflation.
Even with higher inflation and market wobbles, recent studies (Morningstar 2025, Vanguard 2025) show:
Quick 4% Rule Calculator Your safe annual income = Your savings × 0.04 Examples:
(We’ll run your exact numbers free!)
| Savings Amount | Safe Annual Withdrawal (4%) | Safe with 3.5% |
|---|---|---|
| $500,000 | $20,000 | $17,500 |
| $1,000,000 | $40,000 | $35,000 |
| $2,000,000 | $80,000 | $70,000 |
| $3,000,000 | $120,000 | $105,000 |
Does it include Social Security? No — add that on top for extra cushion. What if markets crash? Keep 2–3 years cash; 4% has survived every crash since 1926. Is it still safe in 2026? Yes — studies updated for current rates show 95% success over 30 years.
The 4% Rule is the simplest way to answer “How much is enough?” Start today — the holidays are perfect for dreaming about retirement. Want your exact number? Schedule a free 15-minute consultation at https://jdavenportassociates.com/contact-us/.
About the Author | John F. Davenport, Esq.
John F. Davenport holds a law degree from Pace University, an MBA in finance from Fordham University and undergraduate degree from the University of Notre Dame.
He is a licensed attorney in New York and Connecticut, and a financial advisor.
He founded Davenport & Associates in 1997 and has spent more than 30 years helping CT and NY locally and families across the country build retirement income plans and estate strategies that work together, not against each other.
Davenport & Associates is located at 800 Connecticut Avenue, Suite E401, Norwalk, CT 06854.
Phone: (203) 853-6300 | jdavenportassociates.com
IMPORTANT DISCLAIMER:
Educational only—not investment/tax/legal advice. No strategy guarantees results—vary by rates, markets, laws, personal circumstances. Consult advisors.
Phone: (203) 853-6300 | jdavenportassociates.com This article was recently featured on Yahoo Finance – Link Here