The "4% Rule" is a guideline used in retirement planning that suggests retirees can withdraw 4% of their investment portfolio annually without running out of money over a 30-year period. This rule is based on historical market performance and aims to provide a sustainable income while preserving the principal amount. To apply the 4% Rule, individuals first need to calculate their total retirement savings. For example, if someone has saved $1,000,000, they could withdraw $40,000 each year. This approach helps retirees balance their spending needs with the longevity of their investments, ensuring financial stability throughout retirement.