Retirement Withdrawal Calculator

A retirement withdrawal calculator shows how many years your savings will last at a given spending pace. Withdraw $40,000 a year (the 4% rule) from a $1,000,000 portfolio earning a steady 6% with 3% inflation and the money lasts about 42.8 years, running out in year 43; raise spending to $60,000 and it lasts only about 22.2 years. The first case is the calculator's starting example. That single decision is the difference between money that lasts and money that doesn't.

This tool handles the drawdown phase: turning an existing balance into income. If you are still saving, project your future nest egg first with the Retirement Calculator or model a workplace plan with employer matching in the 401(k) Calculator, then compare account types with the Roth IRA Calculator and Traditional IRA Calculator before returning here to plan the payout.

How the calculation works

The calculator runs a simple drawdown simulation, one year at a time. Each year it withdraws your spending amount at the start of the year, then grows whatever is left by your expected return:

If you keep the inflation option on, next year's withdrawal rises by your inflation rate, so your real spending power stays level: Withdrawalnext = Withdrawal × (1 + inflation). The loop repeats until the balance can no longer cover a full withdrawal. That year is only partly funded, so the result counts it as a fraction: if year 43 can pay 83% of its withdrawal, the money lasts 42 full years plus 0.83 of a year, or about 42.8 years. When growth outpaces the rising withdrawals for good, the calculator says the money never runs out in this model. The 4% reference is calculated separately as 0.04 × starting portfolio so you can compare your plan against the most-cited benchmark.

What is the 4% rule?

The 4% rule comes from William Bengen's article "Determining Withdrawal Rates Using Historical Data" in the October 1994 Journal of Financial Planning. The idea: withdraw 4% of your portfolio in your first year of retirement, then increase that dollar amount by inflation every year after. On a $1,000,000 portfolio that means $40,000 in year one, $41,200 the next year at 3% inflation, and so on. Bengen tested the rule on U.S. returns for every retirement that began from 1926 to 1976, with a portfolio of 50% stocks and 50% intermediate-term Treasury notes: a 4% start never ran out in less than 33 years, and most portfolios lasted 50 years or longer. He recommended a stock allocation between 50% and 75%.

A 1998 study in the AAII Journal, often called the Trinity study, extended the test to 1926 to 1995 data and payout periods of 15 to 30 years. Its authors concluded that early retirees who expect long payout periods should plan on lower withdrawal rates. Both studies describe what happened in past U.S. markets; neither is a guarantee about the future, which is why the 4% rule is a starting point, not a promise.

How much can I withdraw from my portfolio?

First-year income scales directly with portfolio size and withdrawal rate. The table below shows the year-one dollar amount (and monthly equivalent) for common balances at 3%, 3.5%, 4%, and 5% starting rates; divide any annual figure by 12 for the monthly paycheck.

Year-one gross (pre-tax) withdrawal = portfolio × rate. Under the 4% rule this dollar amount then rises with inflation each year; the percentages here describe only the starting year.

How to use this calculator

You only need four inputs to get a realistic picture. Work through them in order:

1. Portfolio value: enter your total invested savings at retirement (401(k), IRA, brokerage, etc.).
2. Withdrawal: choose a dollar amount per year, or switch to "withdrawal rate" and enter a percentage. The 3%/4%/5% shortcut buttons fill in common rates instantly.
3. Expected return: a long-run estimate for your asset mix. The 6% default is an example assumption, not a forecast; try a lower figure to stress-test your plan.
4. Inflation: the Federal Reserve's long-run goal is 2% a year; the 3% default adds a cushion. Leave the inflation box checked so your spending keeps its buying power.

The results update as you type: read the headline number (the years your money lasts and the year it runs out), then scroll the annual table to watch the balance rise from growth and fall from withdrawals year by year.

Who this calculator is for

This tool helps anyone turning a nest egg into income. That includes:

• Near-retirees deciding whether their savings can support the lifestyle they want.
• Early retirees and FIRE planners who need money to last 40 years or more, not 30, and therefore lean toward lower withdrawal rates.
• Current retirees sanity-checking whether their spending is sustainable or needs trimming.
• Anyone comparing strategies (fixed dollar vs. fixed percentage, 3% vs. 4% vs. 5%) to see the trade-off between income and longevity.

If you are still building toward retirement rather than spending down, pair this tool with the 401(k) Calculator or the Compound Interest Calculator first to project the balance you will arrive with, then return here to plan the drawdown.

Key retirement-income terms

• Withdrawal rate: the percentage of your starting portfolio you take in year one. A $50,000 withdrawal from $1,000,000 is a 5% rate.
• Safe withdrawal rate (SWR): the first-year rate that history suggests you can sustain for your whole retirement. In Bengen's 1994 study, 4% was safe for at least 30 years, while 4.25% could fail in 28.
• Drawdown: the phase of life when you spend down your portfolio rather than add to it.
• Sequence-of-returns risk: the danger that bad markets early in retirement do outsized, lasting damage because you are selling into a downturn.
• Real vs. nominal: "real" figures are adjusted for inflation (buying power); "nominal" are raw dollars. Keeping spending level in real terms is the goal of the 4% rule.
• Required minimum distribution (RMD): the minimum the IRS requires you to withdraw each year from traditional IRAs and most workplace plans, starting at age 73 (75 if born in 1960 or later).

Three scenarios on a $1 million portfolio

Holding the portfolio at $1,000,000, a steady 6% return, and 3% inflation, watch how the withdrawal rate changes the outcome:

• 4% ($40,000/yr): the money lasts about 42.8 years and still holds about $1.06 million after 30 years, the textbook "safe" pace.
• 5% ($50,000/yr): the money lasts about 29.1 years and runs out in year 30, just short of a 30-year retirement and risky for an early one.
• 6% ($60,000/yr): the portfolio lasts about 22.2 years and runs out in year 23, which may fall short of a long retirement.

The lesson: each extra percentage point of spending cuts years off how long the money lasts, and the effect compounds because you are also giving up the future growth on the dollars you spent early.

How long will my retirement savings last?

This matrix is the heart of the tool. Each cell is how many years the money lasts with inflation-adjusted withdrawals at 3% inflation, counting the final, partly funded year as a fraction. Read down for your starting withdrawal rate and across for your expected return. "Never" means the steady return keeps the portfolio growing faster than the rising withdrawals, so in this model the money does not run out. Because the simulation is proportional, these year counts hold for any starting balance at the same rate.

Assumes withdrawals at the start of each year rising 3% a year for inflation and a single steady return; taxes, fees, and market volatility are excluded. A 30-year retirement needs the cell to read 30 or higher; a 40-year (early-retirement) plan needs 40 or more.

A second worked example: a smaller portfolio at the 4% rule

Not everyone retires with a million dollars, and the math scales cleanly. Say you reach retirement with a $600,000 portfolio and follow the 4% rule. Your first-year withdrawal is $24,000 (roughly $2,000 a month), rising with inflation each year afterward. Pair that with a hypothetical $22,000 a year from Social Security and your total income is close to $46,000 in year one, and only the $24,000 portion comes from savings. Earning a steady 6% return with 3% inflation, this $600,000 lasts about 42.8 years at that pace, comfortably beyond a 30-year retirement. Bump the withdrawal to $30,000 (a 5% rate) and the same balance lasts about 29.1 years, running out in year 30; push it to $36,000 (6%) and it is gone after about 22.2 years. The takeaway is that the safe dollar amount changes with portfolio size, but the safe percentage does not, which is exactly why withdrawal rate, not portfolio size, is the number to watch.

Worked example: $1 million at the 4% rule, step by step

Here is the simulation itself at milestone years: $1,000,000 starting balance, a $40,000 first-year withdrawal (4%) rising 3% a year for inflation, and a steady 6% return. Notice the balance keeps growing for almost two decades because 6% growth outruns the withdrawal, then tips over once inflation pushes the withdrawal high enough.

Rows show milestone years only; the calculator lists every year. At this pace the balance peaks at about $1.23 million at the end of year 19, still holds about $1.06 million after year 30, and runs out in year 43, when only about 83% of that year's withdrawal can be paid: 42.8 years in total, well beyond a standard 30-year retirement.

How required minimum distributions fit in

Withdrawals from traditional IRAs and most workplace plans eventually stop being optional. Required minimum distributions begin at age 73 for most people and at age 75 for people born in 1960 or later, the ages set by the SECURE 2.0 Act and the IRS's July 2024 final regulations. Each year's minimum is the account balance on December 31 of the prior year divided by a factor from the IRS Uniform Lifetime Table in Publication 590-B:

• Age 73: factor 26.5, a minimum of about 3.8% of the balance.
• Age 75: factor 24.6, about 4.1%.
• Age 80: factor 20.2, about 5.0%.
• Age 85: factor 16.0, or 6.25%.

So in your late 70s and beyond, the required minimum can exceed a 4% spending plan. That changes your taxes more than your budget: an RMD is a withdrawal requirement, not a spending requirement, so after paying the tax you can reinvest the part you do not need in a taxable account, and it keeps working for you. Roth IRAs have no RMDs while the owner is alive, and the first RMD can be delayed until April 1 of the year after you reach the starting age. For your exact figure, use the RMD Calculator.

Fixed-dollar vs. fixed-percentage withdrawals

There are two broad ways to take money out, and the calculator lets you model either by switching between the dollar and rate inputs:

• Fixed inflation-adjusted dollar (the 4%-rule approach): you set a starting amount and raise it by inflation every year, ignoring what the market does. Income is steady and predictable, which makes budgeting easy, but in a long bear market you keep withdrawing the same real amount from a shrinking balance, which is what causes portfolios to fail.
• Fixed percentage of the current balance: you take, say, 4% of whatever the portfolio is worth each year. This can never fully run dry because you always spend a slice of what remains, but your income drops sharply after a bad year: a 30% market fall cuts your paycheck by 30%, which is hard to live on.

Many retirees land between the two with a "guardrail" strategy: start near 4%, then cut spending modestly if the withdrawal rate drifts too high after a downturn, and allow a raise after strong years. Guardrails keep much of the predictability of the fixed-dollar method while adding much of the safety of the percentage method. The flat-return model here cannot simulate those year-to-year adjustments, but you can approximate the bounds by running both a conservative and an optimistic return through the calculator and comparing how long the money lasts in each case.

Why early retirement needs a lower rate

The 4% rule was calibrated to a 30-year retirement: Bengen set a minimum of 30 years of portfolio life and noted that clients who retire at 60 or younger should stay at or below 4%. If you stop working at 50 or 55, your savings may need to last 40 to 45 years, and that longer runway changes the math. Over a longer horizon there are more chances to hit a damaging early downturn, and a fixed real withdrawal has more years to outpace your portfolio's growth. In Bengen's data, a 3% starting rate, and rates up to about 3.5%, never lasted less than 50 years, and the 1998 Trinity study likewise advised early retirees with long payout periods to plan on lower withdrawal rates. In practical terms, funding $40,000 a year takes $1,000,000 at 4% but about $1,143,000 at 3.5% and $1,333,000 at 3%. If you are planning an early or "FIRE" retirement, use this calculator with a longer horizon in mind and a lower rate, and remember that part-time income or a paid-off home can meaningfully ease the pressure on the portfolio. To see how large a balance you would need to build first, work backward with the Retirement Calculator.

What changes the result the most

Adjust the inputs and a few levers clearly dominate:

• Withdrawal rate: the single biggest factor; small spending changes swing the outcome by many years.
• Expected return: a higher return stretches the money, but optimistic assumptions are the most common planning error.
• Inflation: rising prices force ever-larger withdrawals, draining the portfolio faster than a flat spending plan would.
• Retirement length: a plan that "works" for 30 years may fail over 45, so early retirees need lower rates.
• Portfolio size: a larger nest egg supports the same lifestyle at a lower, safer percentage.

Tips for a withdrawal plan that lasts

• Start conservative: if your retirement could exceed 30 years, consider a 3% to 3.5% starting rate rather than 4%.
• Stay flexible: "guardrail" strategies trim spending after bad years and allow raises after good ones, which protects the portfolio.
• Hold a cash buffer: keeping a year or two of spending in cash lets you avoid selling investments during a downturn.
• Layer guaranteed income: Social Security, a pension, or an annuity covers baseline needs so your portfolio only funds the extras.
• Mind the tax order: coordinating taxable, tax-deferred, and Roth withdrawals, and planning ahead for RMDs, can meaningfully extend your after-tax income.

Limitations and assumptions

This is a planning model, not a prediction. Keep these assumptions in mind:

• It assumes a single, steady annual return. Real markets are volatile, so it cannot capture sequence-of-returns risk: the order of good and bad years matters enormously in reality.
• It excludes taxes and investment fees, both of which reduce the income your portfolio actually delivers.
• It does not model Social Security, pensions, or annuities, which can dramatically reduce how much you need from savings.
• It ignores required minimum distributions (RMDs) and lump-sum needs like a new roof or medical costs.
• Withdrawals are treated as taken at the start of each year; different timing assumptions shift the result slightly.

How it compares to related calculators

This page answers "how long will my savings last once I'm spending them?" For a different question, a sister tool fits better:

• To project how big your nest egg will grow before retirement, use the Retirement Calculator.
• To model a workplace plan with employer matching, use the 401(k) Calculator.
• To estimate tax-free growth of after-tax savings, use the Roth IRA Calculator.
• To find your required minimum distribution, use the RMD Calculator.
• To grow a lump sum or regular contributions over time, use the Investment Calculator or Compound Interest Calculator.
• To evaluate a single investment's payback, use the ROI Calculator.

Sources

• William P. Bengen: Determining Withdrawal Rates Using Historical Data, Journal of Financial Planning, October 1994 (reprinted by the Financial Planning Association in 2004).
• AAII Journal (February 1998): Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable (the "Trinity study").
• Internal Revenue Service: Retirement plan and IRA required minimum distributions FAQs and Publication 590-B (2025), Appendix B, Table III (Uniform Lifetime).
• Internal Revenue Service: Required Minimum Distributions, final regulations, Federal Register, July 19, 2024 (applicable age 73, and 75 for people born on or after January 1, 1960).
• Federal Reserve: Why does the Federal Reserve aim for inflation of 2 percent over the longer run?
• Social Security Administration: Retirement Benefits (a key source of guaranteed retirement income).
• U.S. Securities and Exchange Commission (Investor.gov): Compound Interest Calculator (investment growth basics).