The 4% figure you hear about (usually in the "early retirement" circles) includes drawing down your principal gradually over time. Don't remember the numbers exactly, but drawing 4% of your initial nest-egg each year is supposed to give a 95% chance that your savings will last 40 years. Add in Social Security benefits kicking in at age 67 and that percentage goes up to 100% in most cases (unless you have an insanely large nest egg).