The Keep is the portfolio value you need today—before withdrawing this year's living expenses—to fund the years ahead and still reach your long-term goal.
The Keep Calculator™ is an on-line, non-downloadable software calculator for retirement planning — providing temporary use of on-line non-downloadable software for providing online retirement calculators for individual consumers.
The 4% rule is the most cited framework in retirement planning and one of the most misunderstood. Here's what it actually says, where it runs into trouble, and how the Keep answers the question differently.
The 4% rule has been around since the early 1990s and shows up in almost every retirement planning conversation. Its message is simple: if you withdraw 4% of your portfolio in your first year of retirement and adjust that dollar amount for inflation each year after, you have a high probability of not running out of money over a 30-year retirement.
That's a useful starting point. But the rule comes with caveats its fans often skip, and it answers a different question than the one most retirees are actually asking.
The 4% rule originated from the Trinity Study, a 1998 academic paper that backtested withdrawal rates against historical US stock and bond returns. The key findings were that a 4% initial withdrawal rate, adjusted for inflation annually, survived 95% of 30-year periods in the historical data when the portfolio was held in a 50/50 stock-bond mix.
Several things worth noting: it's a historical backtest, not a forward guarantee. It assumes a 30-year retirement, which may be shorter than yours if you retire early or longer than yours depending on health. It assumes a fixed stock-bond allocation and doesn't account for Social Security, pensions, or other guaranteed income. And it defines "success" as not hitting zero — it doesn't address how much you might leave behind or whether you want to spend more in your early years and less later.
The 4% rule is a withdrawal rate. It tells you how much you can take out relative to your starting balance. It doesn't tell you what your balance needs to be right now.
The Keep starts from your actual situation — your spending, your income, your timeline — and answers a direct question: given all of that, what is the least my portfolio needs to be worth right now?
The two approaches produce different outputs, answer different questions, and handle guaranteed income very differently.
| Question | 4% Rule | Keep Method |
|---|---|---|
| What does it tell you? | How much you can withdraw as a percentage of your starting balance | What your portfolio must be worth today to fund your specific plan |
| Output | A percentage (4%) and a dollar amount derived from your balance | A dollar floor — your Keep — in today's dollars |
| Social Security / pension | Not built in; treated as extra income on top of the withdrawal | Netted against living costs year by year; directly reduces the Keep |
| How it handles inflation | Inflates the withdrawal amount each year in nominal terms | Works in real (today's) dollars throughout; inflation is inside the return assumption |
| Landing goal | Success = not hitting zero; no built-in legacy amount | You choose a specific landing goal; the Keep is sized to deliver it |
| When to use it | As a ballpark starting point or portfolio size check | As an annual funded/unfunded check against your actual balance |
The rule works reasonably well as a rough benchmark for portfolio sizing. But a few real-world situations strain it.
Early retirement. A 30-year horizon fits someone who retires at 65. If you retire at 55, you may need the money to last 40 years, and the historically safe withdrawal rate for that horizon is meaningfully lower than 4%.
Guaranteed income changes the math. If Social Security covers half your spending, your portfolio only has to fund the other half. A simple 4% rule applied to your full balance doesn't capture this. The Keep does: guaranteed income reduces your Keep directly, which is why someone with a $27,000 annual benefit and a $60,000 lifestyle has a very different Keep than someone with the same lifestyle and no guaranteed income.
Variable spending over time. Most people don't spend the same amount every year of retirement. The 4% rule assumes a flat, inflation-adjusted draw for the entire period. Real spending often front-loads — more travel and activity in the early years — then moderates. The Keep can accommodate that by letting you run different scenarios.
Not really. The 4% rule is useful for rough planning — figuring out approximately how much you need to save before you retire. The Keep is useful for ongoing management — checking once a year whether you're on track with your actual balance.
Many people also use Monte Carlo tools alongside the Keep. Monte Carlo runs thousands of simulated market paths and reports a probability of success. The Keep gives a deterministic floor: given your assumptions, is your current balance sufficient? All three tools answer different questions and inform the same broad decision.
See how the Keep compares to the 4% rule for your situation.
Run your numbers in the Keep Calculator →This article is educational and is not individualized financial, tax, or investment advice. The 4% rule and related research are discussed for educational purposes and do not constitute a guarantee of any specific outcome.