Shoralis Early retirement math: does the 4% rule work for you?
What is the 4% rule?
The rule is simple: save 25x your total annual spending and you can withdraw 4% a year with the portfolio expected to outlast you. Spending 40,000 a year puts the target at one million.
The rule is built on US market history; under high inflation a 4% withdrawal rate is risky. A more conservative 3-3.5% target raises the number but meaningfully lowers the risk of running out.
The key variable: savings rate
Your retirement date is set not by your salary but by your savings rate. Rough map: saving 10% of income takes ~50 years to financial independence, 25% takes ~30, and 50% takes 15-17.
The formula works both ways: raising the savings rate both accumulates faster and shrinks the target — because while saving you are learning to spend less by the same proportion.
Inflation, sequence risk and health
Over long retirements the biggest danger is sequence risk: a downturn in the first retirement years permanently wounds the portfolio. That is why early retirees hold the first 5-10 years of spending in low-risk assets.
Health costs rise with age and state support has not started for the young retiree. Adding a health buffer to the target is the most neglected line of the plan.
Find your own date
In Shoralis, enter retirement as a goal and add a monthly investment to the line. See — in optimistic, base and pessimistic scenarios — which year the target fills; the spread between the three dates is your plan's resilience.
Run quick experiments on the savings rate: how many years earlier does a 20% bigger monthly investment pull the date? The answer appears on the line in seconds.
Test this decision in the simulator
Run two lives side by side: with and without the decision. See the net-wealth gap in a projection of up to 30 years.
Open the simulator