Safe Withdrawal Rate Calculator
Model retirement withdrawals using the 4% rule with inflation adjustments to see if your portfolio survives.
The 4% rule suggests withdrawing 4% in year one, then adjusting for inflation each year.
Enter your portfolio details and click calculate.
What This Calculator Does
This calculator models retirement portfolio withdrawals over time, showing whether your savings will last through retirement. It applies the initial withdrawal rate (commonly 4%), adjusts withdrawals annually for inflation, and projects year-by-year portfolio balances accounting for investment returns.
The Formula
The 4% rule, based on the Trinity Study, suggests withdrawing 4% of your portfolio in the first year of retirement, then increasing that dollar amount by inflation each year. Historical analysis shows this approach has a high probability of sustaining a portfolio for 30+ years with a balanced stock/bond allocation.
Step-by-Step Example
Enter portfolio value
Your total retirement savings at the start of retirement. Example: $1,000,000.
Set withdrawal rate
The percentage to withdraw in year one. The traditional rate is 4%. More conservative planners use 3.5%.
Set inflation and return assumptions
Historical inflation averages about 3%. A balanced portfolio has historically returned 6-8% nominal.
Choose retirement length
Plan for 30 years minimum. If retiring early, plan for 40-50 years to account for longevity.
Real-World Use Cases
Retirement Readiness
Determine if your current savings can support your desired lifestyle throughout retirement.
Withdrawal Rate Optimization
Test different withdrawal rates to find the balance between lifestyle spending and portfolio longevity.
Early Retirement Planning
Model longer retirement periods (40-50 years) to ensure sustainability for FIRE retirees.
Common Mistakes to Avoid
Assuming constant investment returns. Real returns vary dramatically year to year, and sequence of returns risk can deplete portfolios faster than average returns suggest.
Ignoring inflation adjustments on withdrawals. Fixed dollar withdrawals lose purchasing power over time.
Using a 4% rate without considering current market valuations. When stock prices are historically high, lower rates (3-3.5%) may be more appropriate.
Not accounting for additional income sources like Social Security, pensions, or part-time work that reduce needed portfolio withdrawals.
Frequently Asked Questions
Accuracy and Disclaimer
This calculator uses simplified constant-return assumptions. Actual portfolio performance varies significantly year to year. Sequence of returns risk, unexpected expenses, healthcare costs, and changes in tax law can all affect outcomes. Consult a certified financial planner for retirement planning.
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