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Imagine you’ve finally hit your retirement goal and have a cool $4 million saved. Exciting, right? But now you’re probably wondering how much you can actually pull from that stash every month without running out of cash.

Like most things in personal finance, there’s no cut-and-dry answer. How much you can and should pull depends on what types of accounts the cash is in and what your long-term goals are.

For example, you might not want to pull from an investment account like an IRA at first, but rely primarily on 401(k) funds. But the biggest factor is how long you plan to be retired…which is a nice way of saying, “How many years until you die?”

Luckily, there are a few rules of thumb to tell how much you can withdraw each year.

The 4% rule

This rule was created by financial advisor Bill Bengen back in the ’90s. It’s a simple guideline used by many personal finance folks to figure out how much they can safely withdraw from their nest egg each year without depleting it too soon. The idea is that you can withdraw 4% of your total retirement savings annually and, theoretically, never run out of money for a 30-year retirement.

So, if you have $4 million saved up, applying the 4% rule would give you an annual withdrawal of:

$4,000,000 x 0.04 = $160,000 per year

That’s right — you could theoretically pull $160,000 out every year without exhausting your funds too quickly. Sounds pretty great, right? That’s some serious money to live on and travel with, and you still have room to splurge a little. (Maybe you can finally take that European river cruise?)

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The update to the 4% rule?

Here’s the issue, though: the 4% rule was created in 1994. And as much as I hate to admit it, 1994 was 30 years ago. Personal finance changes, and so do the markets. Recently, Bergen has adjusted his stance on the 4% rule.

He now suggests that most of us could withdraw 5% per year in retirement and are unlikely to run out of money in 30 years.

$4,000,000 x 0.05 = $200,000 per year

It’s not too shabby, especially if you’re planning on living it up in retirement. But others believe that since we’re living longer, retirees should withdraw closer to 3.5%.

With the updated 3.5% withdrawal, your yearly withdrawal from a $4 million nest egg would be:

$4,000,000 x 0.035 = $140,000 per year

While that’s still a lot of money, it’s a bit less than the original 4% rule. But it also means that your funds are more likely to last, giving you peace of mind as you kick back and enjoy your golden years. And hey, it’s still a significant number to work with!

Don’t forget about minimum distribution requirements

While we’re talking about withdrawals, there’s one important detail you don’t want to overlook: required minimum distributions, or RMDs.

RMDs are the minimum amounts you’re required to withdraw from certain retirement accounts like IRAs and 401(k)s once you hit age 73 (formerly 72, thanks to recent changes in tax laws). The government wants to get its share of tax revenue, so RMDs make sure you start tapping into those tax-deferred retirement accounts.

The IRS calculates your RMD based on your life expectancy and the balance of your retirement accounts. If you don’t take your RMD, you’ll face a hefty 25% penalty (yikes!). It’s a good idea to plan ahead to avoid those penalties.

If you’ve saved $4 million for retirement, you’ve got a great foundation. Using the 4% rule, you could withdraw $160,000 per year — but keep in mind that a more conservative 3.5% rule might be a safer bet in today’s unpredictable market. The key to a successful retirement is not just how much you withdraw, but also how you manage it to ensure your money lasts as long as you do.

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