Safe Withdrawal Rate Calculator
How long will your retirement portfolio last? Enter your portfolio value and withdrawal rate to see whether your money outlasts your retirement. Compare different withdrawal rates to find the sustainable spending level.
Portfolio & Withdrawals
Return Assumptions
Portfolio Longevity
Your portfolio never runs out. At a 4.0% withdrawal rate with 4.0% real returns, your portfolio grows faster than you withdraw — it will last indefinitely.
Portfolio Balance Over Time
Your portfolio sustains withdrawals indefinitely at this rate
Withdrawal Rate Sensitivity
How different withdrawal rates affect portfolio longevity on a $1,500,000 portfolio with 4.0% real returns
| Rate | Annual Withdrawal | Portfolio Lasts | Balance at Year 30 |
|---|---|---|---|
| 3.0% | $45,000 | Never depleted | $2,240,321 |
| 3.5% | $52,500 | Never depleted | $1,802,859 |
| 4.0%(yours) | $60,000 | Never depleted | $1,365,396 |
| 4.5% | $67,500 | 50 years | $927,934 |
| 5.0% | $75,000 | 38 years | $490,471 |
| 5.5% | $82,500 | 31 years | $53,009 |
| 6.0% | $90,000 | 27 years | $0 |
Assumes 7% nominal return, 3% inflation (4.0% real return). Withdrawals taken at the start of each year, with the remainder growing at the real return rate. Constant real withdrawal amount (inflation-adjusted).
Key Insights
At 4.0%, your withdrawal rate is below the portfolio’s real growth rate of 4.0%. Your portfolio will grow indefinitely while funding $60,000/year in spending. This is the ideal scenario.
A 4.0% real return means every 1% increase in withdrawal rate above that threshold accelerates depletion dramatically. The math is non-linear: small changes in withdrawal rate produce large changes in portfolio longevity.
This calculator assumes constant real returns. In practice, sequence-of-returns risk means a bear market early in retirement is far more dangerous than one later. Consider holding 2–3 years of expenses in cash or bonds to avoid selling equities during downturns.
Understanding Safe Withdrawal Rates
A safe withdrawal rate (SWR)is the percentage of your portfolio you can withdraw each year in retirement with high confidence that you won’t run out of money. The withdrawal amount is set in year one and then adjusted for inflation annually, regardless of market performance.
The 4% Rule
The 4% ruleoriginates from William Bengen’s 1994 research and the subsequent “Trinity Study.” Using historical U.S. market data from 1926 onward, they found that a diversified portfolio (typically 50–75% stocks, remainder in bonds) survived every historical 30-year retirement period at a 4% initial withdrawal rate, adjusted for inflation annually. The worst-case starting years were right before major bear markets (1929, 1966, 1973, 2000).
Why 4% May Be Too Aggressive — or Too Conservative
Arguments for a lower rate (3–3.5%):Today’s bond yields and stock valuations may produce lower future returns than the historical averages used in the original studies. Early retirees with 40–50 year horizons face more risk than the 30-year period the 4% rule was designed for. International diversification (beyond U.S. markets) historically shows lower safe withdrawal rates.
Arguments for a higher rate (4.5–5%):Most retirees don’t spend a constant inflation-adjusted amount — spending typically decreases in later years. Social Security and pensions reduce the portfolio’s burden. Flexible spending (reducing withdrawals during downturns) significantly increases sustainability. The 4% rule was designed for the worst historical case; most periods support much higher rates.
Sequence of Returns Risk
The biggest threat to a retirement portfolio isn’t average returns — it’s the order of returns. A major bear market in the first few years of retirement forces you to sell shares at low prices to fund withdrawals, permanently depleting the portfolio. This is why the same average return can produce wildly different outcomes depending on when the bad years fall.
Mitigation strategies include: maintaining 1–2 years of expenses in cash or short-term bonds (a “bond tent”), reducing withdrawals during downturns, and using a dynamic withdrawal strategy rather than a fixed percentage.
Variable vs. Fixed Withdrawal Strategies
Fixed:Set your withdrawal in year one (e.g., 4% of $1M = $40,000) and adjust only for inflation. Simple, but doesn’t respond to market conditions.
Guardrails:Set upper and lower bounds. If your withdrawal rate drifts above 5% (due to portfolio decline), cut spending. If it drops below 3.5% (portfolio growth), give yourself a raise. Jonathan Guyton’s “guardrails” approach historically supports higher initial withdrawal rates.
Percentage of portfolio:Withdraw a fixed percentage of the current portfolio each year (e.g., always 4% of whatever the balance is). This never depletes the portfolio but creates volatile income — your spending drops 30% if the market drops 30%.
What This Calculator Shows
This calculator uses a constant real return model — it shows how your portfolio evolves if returns are steady at the rate you specify. Real retirement involves volatile returns, so think of these results as a baseline. For a more conservative analysis, use a lower expected return (3–4% real). The sensitivity table helps you see how different withdrawal rates affect portfolio longevity at your expected return.