The Trinity Study Explained

Every FIRE calculation traces back to one academic paper: the Trinity Study. But most FIRE practitioners have never read it, and what it actually says is more nuanced than "withdraw 4% forever."

What the Trinity Study Is

Full title: "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable" Authors: Philip L. Cooley, Carl M. Hubbard, and Daniel T. Walz Published: 1998, AAII Journal University: Trinity University (hence the name)

What It Actually Studied

The researchers tested withdrawal rates from 1% to 11% across rolling historical periods from 1926 to 1995. They tested different portfolio allocations and retirement horizons (15, 20, 25, and 30 years).

Key findings for a 30-year retirement with a 50/50 to 75/25 stock/bond portfolio:

Withdrawal Rate Success Rate
3% 100%
4% 95-98%
5% 85%
6% 68%
7% 50%

What "Success" Means

The Trinity Study defined "success" as not running out of money within the specified period. It did NOT require the portfolio to maintain its value, ending with $1 after 30 years was counted as a success. This is why calculating your own FIRE number requires adapting the Trinity findings to your specific retirement horizon.

Critical Limitations Everyone Ignores

  1. US-only data. The study only used US stock and bond returns from 1926-1995. International markets have had lower safe withdrawal rates.

  2. 30-year maximum. The study only tested up to 30 years. A FIRE retiree at 40 needs 50+ years.

  3. No fees. The study assumed 0% investment fees. A 1% advisor fee drops the safe withdrawal rate to ~3%.

  4. Static withdrawals. The study assumed you withdraw the same inflation-adjusted amount every year regardless of market performance. Real retirees adjust.

  5. Historical, not predictive. The study said "this worked in the past", not "this will work in the future."

Modern Updates

Researcher Finding Year
Pfau (2010) International data: SWR as low as 0.5% (Japan) 2010
Kitces (2008) CAPE-based dynamic withdrawals can allow 4-5% 2008
Guyton-Klinger (2006) Decision rules increase SWR to 5-5.5% 2006
Big ERN (2018) 3.25-3.5% for 60-year FIRE retirements 2018
Morningstar (2021) 3.3% is the new 4% in low-yield environment 2021

What This Means for Your FIRE Number

  • For a 30-year traditional retirement: 4% is still reasonable
  • For a 50-year FIRE retirement: 3.25-3.5% is safer
  • For a Fat FIRE with flexibility: 4% is fine (you can cut spending)
  • For a Lean FIRE with no margin: 3-3.25% buffer recommended

These targets illustrate the 25x rule in action, higher withdrawal rates correspond to lower multipliers and less margin for error.

Bottom Line

The Trinity Study was groundbreaking, but it's not scripture. Use the 4% rule as a planning benchmark, not a guarantee, see modern updates to the 4% rule for current research. For early retirees with 40-50 year horizons, target 3.25-3.5% withdrawal rates and build in flexibility to reduce spending in down markets.

Safe Withdrawal Calculator FIRE Number Calculator

Sources