Safe Withdrawal Rate Calculator
How much a portfolio can pay out each year in today’s money for as long as you need it, and how long a withdrawal you choose would last.
Result
Sustainable yearly withdrawal, in today’s money: $57,830.10Estimate
At a steady real return. Real returns vary, and a bad run early in retirement shortens how long money lasts.
- As a share of the portfolio
- 5.78%
- Monthly income
- $4,819.17
- Rate that never touches the principal
- 4%
https://calcgallery.com/retirement-planning/safe-withdrawal-rate-calculator/
Results are arithmetic on the returns, rates and horizons you enter, not a forecast and not investment, tax or retirement advice. The site supplies no expected return, inflation rate, contribution limit, tax rate or withdrawal rate. Real returns vary from year to year, and fees, taxes and the order of returns all change the outcome. Check anything that matters with a qualified adviser. Read the full disclaimer
How to use the Safe Withdrawal Rate Calculator
- Enter the portfolio, how many years it has to last, and the real return you want to assume, meaning the return after inflation.
- Read the yearly withdrawal it can sustain, in today's money.
- Optionally enter a withdrawal of your own to see how many years it would last.
Everything is in today’s money
The withdrawal here is a real amount: the same buying power every year, rising with inflation in cash terms. The return must therefore be a real return, the return after inflation. Entering a nominal return, say 7% when inflation is 3%, is the most common mistake in retirement arithmetic, and it overstates what you can safely spend.
How the withdrawal is worked out
A portfolio P that must last n years at a real return i can pay P × i ÷ (1 − (1 + i)^−n) a year, the same formula as a loan payment with the roles reversed. At a 0% real return it is simply P ÷ n. Withdrawing only the real return, P × i, never touches the principal and lasts forever.
Fixed amounts or a fixed percentage
This page takes the same real amount each year, which gives steady income but can run out. Taking a fixed percentage of whatever the portfolio is worth each year can never run out, but the income rises and falls with the markets. Many people use something in between.
What is not modelled
Taxes, fees, spending that changes over retirement, and the fact that nobody withdraws mechanically for 30 years. Real returns vary from year to year, and their order matters, as the sequence example shows.
With your numbers
- Withdrawal = $1,000,000.00 × 4% ÷ (1 − (1 + 4%)^−30) = $57,830.10 a year
- $50,000.00 a year lasts 41.04 years
Quick reference
At a steady real return. Real returns vary, and a bad run early in retirement shortens how long money lasts.
| Example | Sustainable yearly withdrawal, in today’s money |
|---|---|
| 1,000,000 for 30 years at 4% real | $57,830.10 |
| At 2% real | $44,649.92 |
| At 0% real | $33,333.33 |
| For 50 years at 4% real | $46,550.20 |
| At 7% real | $80,586.40 |
| Drawing 50,000 at 4% real | $57,830.10 |
| Drawing 40,000 at 4% real | $57,830.10 |
Common questions about the Safe Withdrawal Rate Calculator
- Is 4% still safe?
- The 4% figure comes from a 1994 study of how US portfolios would have fared over 30-year retirements in the past. It is not a promise about the future, and it was not tested for retirements much longer than 30 years. This page does not recommend a rate; it shows what a portfolio can pay at the real return and horizon you choose.
- What is sequence risk?
- The danger that poor returns come early, while you are withdrawing. Take 1,000,000, withdraw 60,000 a year for 10 years, and apply returns of −15%, −10%, then three years of 5%, three of 10% and two of 15%. The average is 5% a year. In that order, about 602,000 is left. In the reverse order, with the good years first, about 975,000 is left. Same returns, same average, a very different result.
- What happens if I retire into a downturn?
- Withdrawals then sell more of the portfolio at low prices, and what is sold does not recover when markets do. Common responses are to spend less for a while, keep a cash buffer, or start with a lower rate. A steady-return calculation like this one cannot show the effect, which is why the worked example above is here.
- Should the rate change with age?
- A shorter horizon supports a higher withdrawal: 1,000,000 at a 4% real return pays about 57,830 a year for 30 years but only about 46,550 a year for 50. Enter the years you need the money to last.