Retirement Safe Withdrawal Calculator
Estimate how long your retirement nest egg will last based on your spending and inflation.
Projections Summary
Understanding the Safe Withdrawal Rate in Retirement
Planning for retirement is more than just hitting a "magic number" in your savings account. It requires a deep understanding of how your withdrawals, investment returns, and inflation interact over decades. This Retirement Safe Withdrawal Calculator helps you visualize the longevity of your portfolio using personalized data.
What is the 4% Rule?
The "4% Rule" is a classic financial rule of thumb suggesting that if you withdraw 4% of your portfolio in the first year of retirement and adjust that amount for inflation every year thereafter, your money should last for at least 30 years. However, with changing market conditions and longer life expectancies, many experts suggest a more conservative 3.3% to 3.5% rate.
Realistic Example:
If you have $1,000,000 saved and use a 4% withdrawal rate, you would take out $40,000 in Year 1. If inflation is 3% in Year 2, you would withdraw $41,200 ($40,000 + 3%) to maintain the same purchasing power, regardless of whether the stock market went up or down.
If you have $1,000,000 saved and use a 4% withdrawal rate, you would take out $40,000 in Year 1. If inflation is 3% in Year 2, you would withdraw $41,200 ($40,000 + 3%) to maintain the same purchasing power, regardless of whether the stock market went up or down.
Factors That Affect Your Retirement Longevity
- Sequence of Returns Risk: Experiencing a market crash in the first few years of retirement is much more damaging than a crash later on.
- Inflation: Even a modest 3% inflation rate doubles the cost of living roughly every 24 years.
- Asset Allocation: A portfolio heavy in stocks may grow faster but carries higher volatility compared to bonds and cash.
- Taxes: Remember that withdrawals from traditional IRAs and 401(k)s are taxed as ordinary income. Our calculator includes a tax field to help you estimate the "net" impact.
How to Use This Calculator
To get the most accurate results, input your current total liquid net worth intended for retirement. The "Annual Portfolio Return" should be a realistic average (typically 5-8% for balanced portfolios). Be honest about your "Annual Withdrawal" needs by including healthcare, housing, and leisure expenses.
Initial Safe Rate:' + ((withdrawal/savings)*100).toFixed(2) + '%
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html += 'Final Portfolio Balance:' + formatter.format(currentBalance) + '
';
html += 'Years Tracked:' + yearCount + '
';
html += 'Final Annual Withdrawal (Inflation Adj):' + formatter.format(currentWithdrawal) + '
';
resultsList.innerHTML = html;
resultArea.style.display = 'block';
if (ranOutOfMoney) {
statusBox.className = 'status-msg status-danger';
statusBox.innerHTML = '⚠️ Warning: Your portfolio may be exhausted in year ' + yearCount + '. Consider reducing spending or increasing returns.';
} else {
statusBox.className = 'status-msg status-success';
statusBox.innerHTML = '✅ Success: Your portfolio is projected to last the full ' + years + ' years with a remaining balance of ' + formatter.format(currentBalance) + '.';
}
}