Withdrawal Rate Calculator
How much can you safely withdraw? 4% rule + custom variations.
Annual safe withdrawal
$40,000
The 4% rule: take 4% in year 1, then adjust each year for inflation. 30-yr retirements show ~88% success. Drop to 3.25% for 50-yr FIRE retirements.
A safe withdrawal rate is the percentage of your starting portfolio you can pull in the first year of retirement, then adjust for inflation each year afterward, with a high chance the money lasts your full retirement.
The best-known benchmark is the 4% rule. Withdraw 4% of the portfolio in year one, then increase that dollar amount by inflation annually. In historical U.S. data this survived a 30-year retirement in the large majority of cases.
This calculator works in both directions: enter a portfolio to see the yearly income a given rate produces, or enter your desired income to see the portfolio you need at that rate.
How this calculator works
The first-year withdrawal equals portfolio x withdrawal rate. At 4% a $1,000,000 portfolio yields $40,000 in year one; each following year that dollar figure rises with inflation, so at 3% inflation year two is about $41,200, regardless of market moves. To reverse it, required portfolio = desired income / withdrawal rate: $40,000 / 0.04 = $1,000,000, or $40,000 / 0.035 = about $1,143,000 at a more conservative 3.5%. The rule traces to Bengen's 1994 study and the Trinity study, which tested rolling historical 30-year periods. The main threat is sequence-of-returns risk: a market drop in the first few years, combined with fixed inflation-adjusted withdrawals, can permanently shrink the portfolio even if average returns later look fine.
What affects the number
- Retirement length: 30 years supports roughly 4%; a 40-50 year early retirement argues for 3.3-3.7% to reduce depletion risk.
- Sequence-of-returns risk: poor returns in the first 5-10 years are far more damaging than the same returns later.
- Asset allocation: the classic studies assumed roughly 50-75% stocks; too little in stocks can actually lower the sustainable rate over long horizons.
- Inflation: withdrawals are indexed to inflation, so high-inflation stretches raise your dollar withdrawals and stress the portfolio.
- Spending flexibility: trimming withdrawals in down years (guardrail strategies) can support a higher starting rate than a rigid plan.
- Fees and taxes: investment fees and taxes on withdrawals reduce what actually reaches you and effectively lower your safe rate.
Frequently asked questions
What is the 4% rule exactly?
In year one you withdraw 4% of your portfolio's starting value. In every later year you take the same dollar amount adjusted up for inflation, not 4% of the new balance. On a $1,000,000 portfolio that is $40,000 the first year, then about $41,200 the next at 3% inflation. Historically this lasted at least 30 years in most U.S. market scenarios.
Is 4% still considered safe today?
It remains a reasonable starting benchmark, but it is debated. Some researchers suggest 3.3% to 3.7% for longer retirements or lower expected returns, while others argue 4% or slightly higher is fine with a flexible spending plan. The right number depends on your time horizon, allocation, and willingness to adjust spending in bad years.
How much do I need to retire on a given income?
Divide your desired annual income from the portfolio by your withdrawal rate. For $60,000 a year at 4%, you need $1,500,000; at 3.5% you need about $1,714,000. Subtract any income from Social Security or a pension first, since the portfolio only has to cover the remainder.
What is sequence-of-returns risk?
It is the danger that the order of your returns, not just the average, hurts you. Because you withdraw a fixed inflation-adjusted amount, a steep loss early in retirement forces you to sell more shares while prices are low, leaving less to recover when markets rebound. Two retirees with identical average returns can have very different outcomes depending on whether the bad years came first or last.
This calculator provides general estimates for educational purposes only and is not financial, tax, or investment advice. Your actual results depend on your specific situation, tax rules, market returns, and the current year's IRS limits.