Retirement Withdrawal Calculator
Enter your portfolio, how much you withdraw each year, and an expected return to see how long the money lasts. If you withdraw less than it earns, the balance holds instead of shrinking.
How it works
Each year this tool grows the balance by the assumed return, subtracts your withdrawal, and repeats until the money runs out — or holds steady if the return covers the withdrawal.
Where the 4% guideline comes from
The popular "4% rule" traces back to financial planner William Bengen in 1994 and the Trinity Study (Cooley, Hubbard and Walz, 1998). Studying US historical stock and bond returns, they found that an initial withdrawal near 4% of the portfolio, then adjusted for inflation, survived most rolling 30-year retirements. Its corollary is the 25x rule: save roughly 25 times your annual spending. Treat both as planning guidelines, not guarantees.
How to read your result
The headline number is how many years the balance lasts at a fixed return, and the rate label shows your withdrawal as a percent of the portfolio. A lower rate buys a longer runway. If it reads as indefinite, the return simply exceeds the withdrawal in this simplified model.
Key caveats
- Sequence-of-returns risk: poor returns early in retirement drain savings far faster than the same average arriving later.
- Inflation raises the cash you need each year.
- Taxes and fees reduce what you actually keep.
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Frequently Asked Questions
What is the 4% rule?
A guideline from Bengen (1994) and the Trinity Study (1998): withdrawing about 4% of the portfolio in year one, then adjusting for inflation, lasted through most historical 30-year US retirements. It is a planning guide, not a guarantee, and depends on your horizon and markets.
Why does it say "lasts indefinitely"?
Because your annual withdrawal is less than what the portfolio earns, so the principal never falls in this model. Remember the model leaves out inflation and variable returns, so treat an indefinite result with caution.
Do early returns really matter that much?
Yes. A steep drop in the first years of retirement drains savings far faster than the same average return arriving later. This is sequence-of-returns risk, and it is why a margin of safety helps.
What is the 25x rule?
The mirror image of the 4% rule: if 4% a year is sustainable, you need roughly 25 times your annual spending saved before you retire. A $40,000 budget points to about $1,000,000 — a quick target, not a precise promise.
Can I use 4% for a much longer retirement?
Maybe not. The original research targeted about 30 years. For an early retirement spanning 40 years or more, many planners trim the starting rate toward 3 to 3.5% to add a safety buffer.
Does this include inflation and taxes?
No. This is a simplified educational model. It does not adjust for inflation, taxes, or fees, and it assumes a single fixed return every year. Real markets vary, so use the result as a rough guide and revisit it regularly.
This calculator is an educational estimate, not individual financial advice. It ignores inflation, taxes, and return variability (sequence risk).