Plan your retirement portfolio longevity using the 4% Rule logic.
Results Summary
First Year Withdrawal:
Final Year Withdrawal (Adj. for Inflation):
Remaining Balance after years:
function calculateSWR() {
var portfolio = parseFloat(document.getElementById('portfolioValue').value);
var rate = parseFloat(document.getElementById('withdrawalRate').value) / 100;
var returns = parseFloat(document.getElementById('expectedReturn').value) / 100;
var inflation = parseFloat(document.getElementById('inflationRate').value) / 100;
var years = parseInt(document.getElementById('retirementYears').value);
if (isNaN(portfolio) || isNaN(rate) || isNaN(returns) || isNaN(inflation) || isNaN(years)) {
alert("Please enter valid numbers in all fields.");
return;
}
var currentBalance = portfolio;
var firstYearAmount = portfolio * rate;
var currentWithdrawal = firstYearAmount;
var isBroke = false;
var brokeYear = 0;
for (var i = 1; i <= years; i++) {
// Subtract withdrawal at start of year
currentBalance -= currentWithdrawal;
if (currentBalance < 0) {
isBroke = true;
brokeYear = i;
currentBalance = 0;
break;
}
// Apply investment growth
currentBalance *= (1 + returns);
// Adjust withdrawal amount for next year's inflation
currentWithdrawal *= (1 + inflation);
}
document.getElementById('swr-results').style.display = 'block';
document.getElementById('firstYearWithdrawal').innerText = '$' + firstYearAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('finalYearWithdrawal').innerText = '$' + (isBroke ? '0.00' : currentWithdrawal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}));
document.getElementById('remainingBalance').innerText = '$' + currentBalance.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resultYears').innerText = years;
var statusMsg = document.getElementById('statusMessage');
if (isBroke) {
statusMsg.innerText = "WARNING: Portfolio depleted in year " + brokeYear;
statusMsg.style.backgroundColor = "#fff5f5";
statusMsg.style.color = "#c53030";
document.getElementById('remainingBalance').style.color = "#c53030";
} else {
statusMsg.innerText = "SUCCESS: Your portfolio is projected to last " + years + " years.";
statusMsg.style.backgroundColor = "#f0fff4";
statusMsg.style.color = "#2f855a";
document.getElementById('remainingBalance').style.color = "#2f855a";
}
}
How to Use the Safe Withdrawal Rate Calculator
Planning for retirement requires balancing your current spending needs against the longevity of your investment portfolio. This calculator helps you apply the principles of the "4% Rule" (derived from the Trinity Study) to your specific financial situation.
Key Definitions
Withdrawal Rate: The percentage of your initial portfolio you plan to take out in the first year. Common benchmarks range from 3% to 4.5%.
Expected Annual Return: The average yearly growth of your investments (stocks, bonds, and cash). Historically, a 60/40 portfolio has averaged around 7-8% before inflation.
Inflation Rate: The rate at which the cost of living increases. This calculator automatically increases your annual withdrawal by this percentage to maintain purchasing power.
Example Scenario
Imagine you retire with $1,000,000 and choose a 4% withdrawal rate. In Year 1, you withdraw $40,000. If inflation is 3%, in Year 2, you will withdraw $41,200 ($40,000 + 3%) to buy the same amount of goods and services, regardless of how the stock market performed that year.
The Importance of "Sequence of Returns"
While this calculator uses a steady average return, real markets are volatile. If the market drops significantly in the first few years of your retirement (a "bad sequence"), your portfolio may deplete faster than this linear calculation suggests. Experts often recommend "flexible withdrawal strategies" where you reduce spending during market downturns to preserve capital.
Note: This tool is for educational purposes only. It assumes constant returns and inflation, which do not occur in the real world. Consult with a certified financial planner for personalized advice.