Retirement Withdrawal Calculator
Plan sustainable withdrawals using the 4% rule and beyond
How much can you safely withdraw from your retirement portfolio each year without running out of money? Our withdrawal strategy calculator compares the classic 4% rule, conservative 3.5% approach, dynamic percentage strategies, and custom rates. Visualize your portfolio's longevity, understand success probabilities based on the Trinity Study, and optimize your tax-efficient withdrawal sequence.
Open Source & Transparent
All withdrawal calculations are verified and published on GitHub. We welcome your feedback and contributions to improve our tools.
Recommended Strategy
4% Rule (Traditional)Highly Sustainable
$40,000/year
Portfolio
$1.0M
Success Rate
95%
Years in Retirement
30
Final Balance
$2.1M
Portfolio & Retirement Details
4% Rule (Traditional)
Withdraw 4% of initial portfolio, adjusted for inflation annually. Based on Trinity Study.
3.5% Rule (Conservative)
Lower withdrawal rate for increased safety and longer retirement periods.
Dynamic 4%
Recalculate 4% based on current portfolio value each year. Variable income but safer.
Custom 4.5%
Your custom 4.5% withdrawal rate (inflation-adjusted).
Key Insights
Real Return Rate
3.9%
After 3% inflation adjustment
Monthly Income (4% Rule)
$3,333
From $1.0M portfolio
Withdrawal Rate Impact
Each 0.5% increase in withdrawal rate can reduce success probability by 10-15%
Dynamic vs Fixed
Dynamic strategies provide variable income but much higher success rates
Important Disclaimer
This calculator provides estimates based on historical data and simplified assumptions. Actual retirement outcomes depend on:
- Actual market returns (which vary significantly from averages)
- Sequence of returns (timing matters enormously in early retirement)
- Inflation rates (especially healthcare inflation)
- Tax law changes and your specific tax situation
- Unexpected expenses (medical, family emergencies)
- Longevity (you might live longer than expected)
Consider working with a Certified Financial Planner (CFP) who can provide personalized Monte Carlo simulations and comprehensive retirement income strategies. This tool is for educational purposes—not professional financial advice.
Understanding Retirement Withdrawal Strategies
One of the biggest challenges in retirement planning is determining a sustainable withdrawal rate—how much you can spend each year without running out of money. The answer depends on your portfolio size, investment returns, inflation, and how long you expect to live. Getting this right is crucial: withdraw too much and risk running out; withdraw too little and sacrifice quality of life.
The 4% Rule (Trinity Study)
The 4% rule comes from the "Trinity Study" which analyzed historical market data from 1926-1995. Researchers found that withdrawing 4% of your initial portfolio in year one, then adjusting that amount for inflation each year, had a 95% success rate over 30-year periods with a balanced 50/50 stock/bond portfolio.
How It Works
Year 1: Withdraw 4% of initial portfolio
$1,000,000 × 4% = $40,000
Year 2: Adjust for inflation (e.g., 3%)
$40,000 × 1.03 = $41,200
Year 3+: Continue inflation adjustments
Success Rates by Withdrawal Rate
| Rate | 30-Year Success |
|---|---|
| 3.5% | ~98% |
| 4.0% | ~95% |
| 5.0% | ~75% |
| 6.0% | ~50% |
| 7.0%+ | ~25% |
Fixed vs. Dynamic Withdrawal Strategies
Fixed Strategy (Traditional 4% Rule)
Withdraw a fixed dollar amount based on your initial portfolio, adjusted only for inflation each year. Provides predictable income but higher risk of running out if markets perform poorly early.
Predictable, consistent income
Easy budgeting and planning
Higher sequence of returns risk
Dynamic Strategy
Recalculate your withdrawal as a percentage of your current portfolio each year. Income varies but you'll never run out—withdrawals automatically decrease in down markets.
Adapts to market conditions
Near-zero depletion risk
Variable income year-to-year
Understanding Sequence of Returns Risk
Sequence of returns risk is perhaps the most underappreciated danger in retirement planning. Even if your portfolio achieves excellent average returns over your retirement, poor returns in the early years can permanently damage your portfolio.
Example: Two retirees each start with $1 million and withdraw $40,000/year. Both experience the same set of annual returns, but in different orders. Retiree A has good returns early and poor returns later—ends with $800,000. Retiree B has poor returns early and good returns later—runs out at age 83. Same average return, dramatically different outcomes.
Frequently Asked Questions
Is the 4% rule outdated?
Not outdated, but worth adjusting. The original study used 1926-1995 data with higher bond yields and shorter life expectancies. With today's lower expected returns and longer retirements, many advisors recommend 3.5% for added safety, or using dynamic strategies that adjust to market conditions.
What if I have other income sources like Social Security?
Guaranteed income sources like Social Security, pensions, or annuities reduce your required portfolio withdrawals. If you need $60,000/year and Social Security provides $24,000, you only need to withdraw $36,000 from your portfolio— effectively a 2.4% withdrawal rate on a $1.5M portfolio, which is extremely safe.
When should I use a lower withdrawal rate?
Consider 3-3.5% if you: retire before age 65, expect a 40+ year retirement, have a conservative portfolio allocation, want to leave a legacy, or have significant expected healthcare costs. Being conservative early gives you flexibility to increase later if markets perform well.
How do Required Minimum Distributions (RMDs) affect my strategy?
Starting at age 73, you must take RMDs from Traditional IRAs and 401(k)s. These mandatory withdrawals may exceed your desired withdrawal rate, especially in later years. Plan ahead by considering Roth conversions before RMDs begin to reduce their impact. Roth IRAs have no RMDs during your lifetime.
Should I reduce spending during market downturns?
Yes! Flexibility is one of your biggest advantages. The "guardrails" approach suggests reducing discretionary spending by 10-15% if your portfolio drops 20%+ from its peak, then gradually increasing when markets recover. This can significantly improve long-term success rates while still allowing for good years.
What account should I withdraw from first?
Generally: 1) RMDs (required), 2) Taxable accounts (only gains taxed), 3) Tax-deferred (Traditional IRA/401k), 4) Roth accounts last (tax-free growth). However, this isn't absolute—sometimes it makes sense to do Roth conversions in low-income years or realize capital gains when in the 0% bracket. Review your tax situation annually.
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