Determine the sustainability of your retirement spending plan. This calculator estimates your initial withdrawal rate and projects how long your portfolio might last given investment returns and inflation erosion.
Initial Withdrawal Rate:–
Estimated Portfolio Longevity:–
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function calculateWithdrawal() {
// 1. Get inputs by ID match
var savingsStr = document.getElementById('retSavings').value;
var spendStr = document.getElementById('annualSpend').value;
var returnStr = document.getElementById('estReturn').value;
var inflationStr = document.getElementById('estInflation').value;
// 2. Parse and validate inputs
var savings = parseFloat(savingsStr);
var spend = parseFloat(spendStr);
var returnRate = parseFloat(returnStr) / 100;
var inflationRate = parseFloat(inflationStr) / 100;
if (isNaN(savings) || isNaN(spend) || isNaN(returnRate) || isNaN(inflationRate) || savings <= 0 || spend 0 && years < maxYears) {
// Add investment growth
currentBalance += (currentBalance * returnRate);
// Subtract spending at start of year (annuity due)
currentBalance -= currentAnnualSpend;
// Increase spending for next year based on inflation
currentAnnualSpend += (currentAnnualSpend * inflationRate);
years++;
// Check if balance went negative this year
if (currentBalance = maxYears && currentBalance > 0) {
longevityText = "60+ Years (Portfolio likely grows indefinitely)";
notesText = "Based on these parameters, your portfolio growth exceeds your inflation-adjusted withdrawals.";
} else {
longevityText = years + " Years";
notesText = "At year " + years + ", the portfolio would be depleted based on the increasing annual withdrawals.";
}
// 6. Display results
document.getElementById('resultOutput').style.display = 'block';
document.getElementById('initialRateResult').innerHTML = initialRate.toFixed(2) + "%";
document.getElementById('longevityResult').innerHTML = longevityText;
document.getElementById('calcNotes').innerHTML = notesText;
}
Understanding Your Retirement Withdrawal Rate
Your retirement withdrawal rate is the percentage of your total retirement portfolio that you spend in a given year. Understanding this number is crucial for ensuring you don't outlive your savings.
How This Calculator Works
This tool looks at four key factors to determine portfolio sustainability:
Portfolio Size: Your total current investable assets dedicated to retirement.
Annual Spend: How much cash you need to pull from investments in year one.
Investment Return: The average annual growth you expect from your mix of stocks and bonds.
Inflation: The rate at which the cost of living increases. This calculator assumes your spending needs will rise annually matching this rate to maintain purchasing power.
The "4% Rule" Context
Historically, financial advisors have often cited the "4% Rule," suggesting that withdrawing 4% of your portfolio in the first year of retirement, and subsequently adjusting that dollar amount for inflation, gives a high probability of your money lasting for 30 years. However, in periods of low investment returns or high inflation, a lower rate (like 3% to 3.5%) might be safer. Conversely, if you have higher expected returns or a shorter time horizon, a higher rate might be acceptable.
Use the results above as a starting point for planning. If the Estimated Portfolio Longevity is shorter than your life expectancy, consider saving more, spending less, or adjusting your investment strategy.