Retirement Withdrawal Calculator
See how long your savings will last — or find your sustainable withdrawal rate
With a $1,000,000 portfolio and $40,000 per year withdrawals (4.0% rate), your savings are projected to last 45.4 yrs. Adjusted for 3% inflation, that's 45.4 yrs of today's purchasing power.
Reducing your annual withdrawal by $4,000 would extend portfolio life by 12.3 years.
What Is the 4% Rule? A Simple Guide to Safe Retirement Withdrawals
The 4% rule is a retirement spending guideline based on research by financial planner William Bengen in 1994. It suggests withdrawing 4% of your portfolio in the first year of retirement, then adjusting that dollar amount for inflation each year. The Trinity Study (1998) confirmed that this approach survived 95% of historical 30-year periods for portfolios with at least 50% stocks.
While no rule guarantees future success, the 4% guideline remains the most widely cited starting point for retirement planning. Use the calculator above to test how different withdrawal rates affect your portfolio longevity under your own assumptions.
Worked Example: How Long Will $1 Million Last at Different Withdrawal Rates?
Starting with a $1,000,000 portfolio, 6% annual returns, and 3% inflation: at a 3% withdrawal rate ($30,000 per year), your money lasts over 50 years. At 4% ($40,000 per year), it lasts about 33 years. At 5% ($50,000 per year), it lasts roughly 22 years. The difference between 3% and 5% is nearly 30 years of financial security.
Adjust the inputs above to see your own scenario. Small changes in withdrawal rate create surprisingly large differences in portfolio longevity — which is why finding the right rate matters more than optimizing investment returns.
Fixed Amount vs Fixed Percentage: Two Philosophies of Retirement Spending
A fixed-amount strategy withdraws the same inflation-adjusted dollar amount each year, providing predictable income but risking portfolio depletion if markets underperform. A fixed-percentage strategy withdraws a set percentage of your current balance each year — your income fluctuates, but your portfolio mathematically never reaches zero.
Neither approach is universally better. Fixed amount suits retirees who need stable cash flow. Fixed percentage suits those who can tolerate income variability in exchange for portfolio safety. Use the strategy toggle above to compare both approaches side by side on the same chart.
How Inflation Silently Erodes Your Retirement Purchasing Power
At 3% annual inflation, $40,000 of purchasing power today requires $72,000 in nominal dollars after 20 years. Many retirees underestimate this effect because their bank balance looks stable while its real value steadily declines. This calculator adjusts for inflation by default, showing results in today's dollars so you can plan realistically.
Sequence-of-Returns Risk: Why the First 5 Years Matter Most
Two retirees with identical average returns over 30 years can have vastly different outcomes depending on the order of those returns. A 30% market drop in year one forces you to sell more shares at low prices, leaving fewer shares to recover. This is why the first 5-10 years of retirement are the most critical for portfolio survival.
Finding Your Personal Withdrawal Rate
Switch to the Sustainable Withdrawal mode above to find the exact annual amount your portfolio can support for your planned retirement length. This mode solves the annuity equation for your specific combination of portfolio size, return expectations, and time horizon.
Early Retirement (FIRE) Withdrawal Strategies
For retirement horizons of 40+ years, many researchers suggest 3.0–3.5% as a safer starting rate. The longer your retirement, the more vulnerable you are to sequence-of-returns risk and the compounding effect of inflation. Use our FIRE Calculator to determine when you can retire, then return here to plan your withdrawal strategy.
The Role of Asset Allocation in Withdrawal Success
The Trinity Study found portfolios with at least 50% stocks had higher success rates for 30-year periods because stocks provide growth that outpaces inflation. However, 100% stock portfolios have more volatility and greater sequence-of-returns risk. Most practical advice recommends 40-75% stocks for retirees, balancing growth potential with stability.
Common Retirement Withdrawal Mistakes to Avoid
The most common mistakes include ignoring inflation (planning with nominal instead of real returns), withdrawing too aggressively in early retirement, failing to account for sequence-of-returns risk, and not adjusting spending during market downturns. Test different scenarios with the calculator above to understand how each variable affects your outcome.
Frequently Asked Questions
- What is the 4% rule and is it still valid?
- The 4% rule suggests withdrawing 4% of your initial retirement portfolio in year one, then adjusting for inflation annually. Based on the Trinity Study, it survived 95% of historical 30-year periods. Current research suggests 3.5–4.5% depending on asset allocation and retirement length. Adjust the inputs above to test your personal rate.
- How long will $1 million last in retirement?
- At a 4% withdrawal rate ($40,000 per year) with 6% returns and 3% inflation, $1 million lasts approximately 33 years. Use the calculator above to test your specific portfolio size, withdrawal amount, and return assumptions.
- What is the difference between fixed amount and fixed percentage withdrawal?
- Fixed amount withdrawals provide predictable income but risk portfolio depletion. Fixed percentage withdrawals (e.g., 4% of current balance each year) never fully deplete your portfolio but provide variable income — more in good years, less in downturns. Use the strategy toggle above to compare both approaches.
- How does inflation affect retirement withdrawals?
- Inflation erodes purchasing power over time. A $40,000 withdrawal today buys significantly less in 20 years at 3% inflation. This calculator adjusts for inflation by default, showing results in today's purchasing power so you can plan realistically.
- What is a sustainable withdrawal rate for early retirees?
- For retirement horizons of 40+ years (early retirees / FIRE), research suggests 3.0–3.5% is safer than the standard 4%. The longer your retirement, the more vulnerable you are to sequence-of-returns risk. Use the Sustainable Withdrawal mode to find the rate that matches your specific horizon.
- What is sequence-of-returns risk and why does it matter?
- Sequence-of-returns risk means that a major market downturn early in retirement is far more damaging than one later. A 30% drop in year 2 forces you to sell more shares at low prices, leaving fewer shares to recover. Two retirees with identical 30-year average returns can have vastly different outcomes depending on the order of those returns. Flexible spending — reducing withdrawals 10-20% during bear markets — is the best defense.