Source: https://guthlabs.ai/docs/instruments/retirement-nest-egg-4-rule-estimator/

instrument / verified-clean

# Retirement Nest Egg (4% Rule) Estimator

The current ledger marks this instrument verified clean within the source-bound verification corpus.

Status: **VERIFIED_CLEAN**Lifecycle: **verified-clean**

## Inspectable records

[01**Overview**Purpose and lifecycle](<https://guthlabs.ai/docs/instruments/retirement-nest-egg-4-rule-estimator/>)[02**Mechanism**Method and assumptions](<https://guthlabs.ai/docs/instruments/retirement-nest-egg-4-rule-estimator/mechanism/>)[03**Implementation**Binding and validation](<https://guthlabs.ai/docs/instruments/retirement-nest-egg-4-rule-estimator/implementation/>)[04**Qualification**Evidence and errata](<https://guthlabs.ai/docs/instruments/retirement-nest-egg-4-rule-estimator/qualification/>)

## Ledger state

The current ledger marks this instrument verified clean within the source-bound verification corpus.

**Area**: Finance, Economics & Business (educational only — never individualized investment, tax, or legal advice)

**Tranche**: tranche-5

**Evidence ID**: t5-204

**Ledger rows**: 1

No ledger note is attached.

## Review findings

The core arithmetic is standard for a rough educational estimator. Final approval requires an explicit input contract stating whether the rate is entered as a percentage such as 4 or a decimal such as 0.04, plus validation that the rate is positive for target-nest-egg calculations. The existing educational-only and rule-of-thumb disclaimer is appropriate.

### Formula and scope findings

- The formulas are mathematically correct for a decimal withdrawal rate: sustainable_withdrawal = balance × rate and target_nestegg = annual_spend ÷ rate. However, the specification does not explicitly define whether an input of 4 means 4% or 0.04; the implementation must normalize a percentage input by dividing by 100.

- The target_nestegg calculation requires withdrawal_rate to be nonzero and positive; this input constraint is not specified.

### Unit assumptions

- Balance and desired annual spend use the same currency and the same nominal or real-dollar basis.

- Desired annual spend is an annual amount, not a monthly amount; if monthly input is accepted, it must be multiplied by 12 first.

- A displayed withdrawal rate of 4% is converted to the decimal 0.04 before arithmetic; the default must therefore be 0.04 internally.

- The formula ignores taxes, fees, inflation adjustments, portfolio volatility, longevity, and sequence-of-returns risk.

## Boundary hardening

### Recorded hazards

- target_nestegg causes division by zero when withdrawal_rate is 0%; reject zero before calculation.

- Negative withdrawal rates, negative balances, or negative annual spending should be rejected as invalid inputs.

- Very small positive withdrawal rates can produce extremely large target nest-egg values and may require range or overflow handling.

- Rates above 100% are mathematically computable but generally require an explicit warning or validation rule.

- The 4% rule is a historical rule of thumb, not a guaranteed sustainable withdrawal rate; the stated honest label should be displayed prominently and the result must not be presented as individualized financial advice.

## Errata and corrections

No applied erratum is attached to this unique-name record.

## Inspectable example

4 review vectors are recorded. One source-bound sample is shown below.

````
{
  "inputs": {
    "calculation": "sustainable_withdrawal",
    "balance": 1000000,
    "withdrawal_rate_percent": 4
  },
  "expected_outputs": {
    "sustainable_annual_withdrawal": 40000
  },
  "working": "Convert 4% to decimal: 4 ÷ 100 = 0.04; multiply balance by rate: 1,000,000 × 0.04 = 40,000."
}
````

## Related workflows

No source-defined multi-instrument workflow membership is recorded.

## Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

- `VERIFIED_LEDGER.json · VERIFIED_CLEAN`

- `evidence-tranche5/tranche5-results.json`