A retirement guideline stating that withdrawing 4% of a portfolio's value in the first year of retirement, then adjusting that dollar amount for inflation every year after, historically had a high success rate of lasting at least 30 years without running out.
Say you retire with $1,000,000. Year one, you withdraw 4% — $40,000. Year two, you take $40,000 plus whatever inflation was (say 3%, so $41,200), regardless of how the market did that year. Repeat every year. The rule comes from research (often called the Trinity Study) that tested this approach against decades of real historical US market returns and found it held up in the vast majority of scenarios.
It was built on a roughly 30-year retirement horizon and US market history — both of which matter for FIRE folks retiring in their 30s or 40s, who might need the money to last 50+ years. Many early retirees use a lower rate (3-3.5%) as a safety margin for that longer runway.