Safe Withdrawal Rate Calculator
Test a withdrawal rate such as the 4% rule against your assumptions.
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Safe Withdrawal Rate Calculator by TheCalcTools
How the Safe Withdrawal Rate Calculator works
Enter your portfolio, the percentage withdrawn in the first year, and expected return and inflation.
Withdrawals rise with inflation each year.
The calculator finds how many years the portfolio lasts using the real return.
The formula
Worked example
Using the default values shown in the calculator:
| Portfolio value | $1e+06 |
|---|---|
| Initial withdrawal rate (%) | 4 % |
| Expected annual return (%) | 5 % |
| Inflation (%) | 2.5 % |
- Withdrawal = 4% × $1,000,000 = $40,000 a year ($3,333 a month).
- Real return = 2.44%.
- The portfolio lasts about 39.0 years.
Result:
| Annual withdrawal | $40,000 |
|---|---|
| Monthly income | $3,333 |
| Real return after inflation | 2.44% |
| Portfolio lasts (years) | 39.0 |
Frequently asked questions
What is the 4% rule?
A guideline from US historical data suggesting an initial 4% withdrawal, adjusted for inflation, survived most 30-year retirements. It is not a guarantee, and returns may differ.
What risks does this ignore?
Sequence-of-returns risk (poor early returns), taxes, fees, changing spending and longevity beyond the period.
Sources and further reading
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This calculator gives estimates for information only. It is not financial advice, and your lender's or provider's figures will govern. Rates, fees and rules vary. See our disclaimer.