body {
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
line-height: 1.6;
color: #333;
max-width: 800px;
margin: 0 auto;
padding: 20px;
}
.swr-calculator-container {
background-color: #f8f9fa;
border: 1px solid #e9ecef;
border-radius: 8px;
padding: 30px;
margin-bottom: 40px;
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
}
.swr-calc-header {
text-align: center;
margin-bottom: 25px;
}
.swr-calc-header h2 {
margin: 0;
color: #2c3e50;
}
.swr-input-group {
margin-bottom: 20px;
}
.swr-input-group label {
display: block;
margin-bottom: 8px;
font-weight: 600;
color: #495057;
}
.swr-input-wrapper {
position: relative;
display: flex;
align-items: center;
}
.swr-currency-symbol, .swr-percent-symbol {
position: absolute;
color: #6c757d;
font-weight: bold;
}
.swr-currency-symbol {
left: 12px;
}
.swr-percent-symbol {
right: 12px;
}
.swr-input-field {
width: 100%;
padding: 12px;
padding-left: 30px; /* space for currency symbol */
border: 1px solid #ced4da;
border-radius: 4px;
font-size: 16px;
transition: border-color 0.15s ease-in-out;
}
.swr-input-field.percent {
padding-left: 12px;
padding-right: 30px;
}
.swr-input-field:focus {
border-color: #4dabf7;
outline: 0;
box-shadow: 0 0 0 3px rgba(77, 171, 247, 0.25);
}
.swr-btn {
display: block;
width: 100%;
background-color: #228be6;
color: white;
border: none;
padding: 14px;
font-size: 18px;
font-weight: 600;
border-radius: 4px;
cursor: pointer;
transition: background-color 0.2s;
}
.swr-btn:hover {
background-color: #1c7ed6;
}
.swr-results {
margin-top: 30px;
background-color: #fff;
border: 1px solid #dee2e6;
border-radius: 6px;
padding: 20px;
display: none;
}
.swr-result-row {
display: flex;
justify-content: space-between;
align-items: center;
padding: 12px 0;
border-bottom: 1px solid #f1f3f5;
}
.swr-result-row:last-child {
border-bottom: none;
}
.swr-result-label {
font-weight: 500;
color: #495057;
}
.swr-result-value {
font-weight: 700;
color: #212529;
font-size: 1.1em;
}
.swr-verdict {
margin-top: 15px;
padding: 15px;
border-radius: 4px;
font-weight: 600;
text-align: center;
}
.swr-safe {
background-color: #d3f9d8;
color: #2b8a3e;
}
.swr-warning {
background-color: #fff3bf;
color: #f08c00;
}
.swr-danger {
background-color: #ffe3e3;
color: #c92a2a;
}
.swr-content {
margin-top: 50px;
}
.swr-content h2 {
color: #343a40;
border-bottom: 2px solid #e9ecef;
padding-bottom: 10px;
margin-top: 40px;
}
.swr-content h3 {
color: #495057;
margin-top: 25px;
}
.swr-content ul {
margin-bottom: 20px;
}
.swr-content li {
margin-bottom: 10px;
}
@media (max-width: 600px) {
.swr-calculator-container {
padding: 15px;
}
}
function calculateSWR() {
var portfolio = parseFloat(document.getElementById('swr-portfolio').value);
var withdrawal = parseFloat(document.getElementById('swr-withdrawal').value);
var returnRate = parseFloat(document.getElementById('swr-return').value);
var inflation = parseFloat(document.getElementById('swr-inflation').value);
if (isNaN(portfolio) || isNaN(withdrawal) || isNaN(returnRate) || isNaN(inflation)) {
alert("Please enter valid numbers for all fields.");
return;
}
if (portfolio <= 0) {
alert("Portfolio value must be greater than zero.");
return;
}
// 1. Calculate the raw withdrawal rate
var rawRate = (withdrawal / portfolio) * 100;
// 2. Calculate the "Standard Safe Amount" (4% Rule)
var safeAmount = portfolio * 0.04;
// 3. Calculate Longevity via simulation
var balance = portfolio;
var yearsLasted = 0;
var currentWithdrawal = withdrawal;
var maxYears = 60; // Simulation cap
var stillSolvent = true;
for (var i = 1; i <= maxYears; i++) {
// Apply Growth
var growth = balance * (returnRate / 100);
// Subtract Withdrawal
balance = balance + growth – currentWithdrawal;
if (balance <= 0) {
yearsLasted = i;
stillSolvent = false;
break;
}
// Adjust withdrawal for inflation for next year
currentWithdrawal = currentWithdrawal * (1 + (inflation / 100));
}
if (stillSolvent) {
yearsLasted = maxYears + "+";
}
// Display Results
document.getElementById('swr-results').style.display = 'block';
document.getElementById('swr-result-rate').innerHTML = rawRate.toFixed(2) + "%";
document.getElementById('swr-result-safe-amount').innerHTML = "$" + safeAmount.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('swr-result-years').innerHTML = yearsLasted + " Years";
// Generate Verdict
var verdictBox = document.getElementById('swr-verdict-box');
var verdictText = "";
// Remove existing classes
verdictBox.classList.remove('swr-safe', 'swr-warning', 'swr-danger');
if (rawRate 30)) {
verdictBox.classList.add('swr-safe');
verdictText = "Safe: Your withdrawal rate is sustainable according to historical standards.";
} else if (rawRate > 4 && rawRate <= 5.5) {
verdictBox.classList.add('swr-warning');
verdictText = "Caution: Your withdrawal rate is higher than the recommended 4%. You may face depletion risk in " + yearsLasted + " years.";
} else {
verdictBox.classList.add('swr-danger');
verdictText = "High Risk: Your portfolio is projected to be depleted in " + yearsLasted + " years.";
}
verdictBox.innerHTML = verdictText;
}
How to Calculate Safe Withdrawal Rate: A Comprehensive Guide
Calculating your Safe Withdrawal Rate (SWR) is one of the most critical steps in planning for retirement or financial independence. It determines the percentage of your investment portfolio you can withdraw annually without running out of money before the end of your life. This guide explains the mathematics behind SWR, the famous "4% Rule," and how to use our calculator to stress-test your financial plan.
What is a Safe Withdrawal Rate?
The Safe Withdrawal Rate is the maximum percentage of your initial retirement portfolio that you can withdraw in the first year of retirement—adjusted for inflation in subsequent years—with a high probability that you will not deplete your assets for at least 30 years. It balances two competing risks:
- Longevity Risk: Running out of money while you are still alive (withdrawing too much).
- Lifestyle Risk: Living far below your means unnecessarily (withdrawing too little).
The Formula
The basic calculation for your current withdrawal rate is simple:
Withdrawal Rate (%) = (Annual Withdrawal Amount ÷ Total Portfolio Value) × 100
For example, if you have saved $1,000,000 and plan to spend $40,000 per year:
($40,000 ÷ $1,000,000) × 100 = 4.0%
Understanding the 4% Rule
The "4% Rule" is a rule of thumb derived from the Trinity Study (1998). The study analyzed historical stock and bond returns over various 30-year periods from 1926 to 1995. It concluded that a portfolio consisting of 50% stocks and 50% bonds rarely ran out of money if the retiree withdrew 4% of the initial balance in the first year and adjusted that dollar amount for inflation every year thereafter.
Key Assumptions of SWR Calculations
- Inflation Adjustment: You increase your withdrawal dollar amount every year to maintain purchasing power.
- Total Return: The portfolio grows through a combination of capital appreciation (stock price increases) and dividends/interest.
- Sequence of Returns Risk: The order in which investment returns occur matters. A market crash early in retirement is far more dangerous than one occurring later, as early losses deplete the capital base needed for future growth.
How to Use This Calculator
This tool goes beyond the simple percentage calculation by simulating how your portfolio might perform over time given specific return and inflation variables.
- Total Portfolio Value: Enter the total current value of your invested assets (stocks, bonds, cash). Do not include equity in your primary residence unless you plan to sell it.
- Annual Desired Withdrawal: Enter the amount of cash you need from your portfolio to cover yearly living expenses. Deduct any other income sources like Social Security or pensions from your total expenses first.
- Expected Annual Return: This is the Compound Annual Growth Rate (CAGR) you expect from your investments. Historically, a diversified stock/bond portfolio might return 5% to 8% nominally, but conservative estimates (5-6%) are safer.
- Estimated Inflation Rate: The rate at which the cost of living increases. The historical average in the US is roughly 3%.
Example Calculation
Let's say you plan to retire early with the following numbers:
- Portfolio: $1,500,000
- Spending: $60,000/year
- Return: 6%
- Inflation: 3%
Your withdrawal rate is ($60,000 / $1,500,000) = 4.0%. According to the 4% rule, this is generally considered safe for a 30-year horizon. However, if you assume a lower return of 4% due to poor market conditions, the calculator might show that the money runs out in year 28, indicating you might need to lower your spending or increase your savings.
Limitations and Considerations
While the 4% rule is a great starting point, it is not a guarantee. Factors such as a longer retirement horizon (40+ years for early retirees), extremely high inflation, or prolonged market stagnation can impact success. Many modern financial planners suggest a dynamic withdrawal strategy—spending less in bad market years—to significantly increase the safety of your portfolio.