Safe Withdrawal Rate Calculator
Check whether a given withdrawal rate can fund an inflation-adjusted income for your whole retirement, or whether the portfolio runs dry first.
Will your portfolio go the distance?
Pick a starting withdrawal rate, then watch an inflation-adjusted income run against your portfolio year by year until retirement ends or the money runs out.
Understanding Safe Withdrawal Rates
Where the 4% Rule Came From
William Bengen tested every rolling 30-year retirement in US market history in 1994 and found that 4%, raised each year with inflation, was never exhausted. The 1998 Trinity study by Cooley, Hubbard and Walz repeated the exercise with stock and bond portfolios from 1926 onward and reached similar conclusions. Both assumed roughly 50% to 75% in stocks, a 30-year horizon, and no fees or taxes.
Why It Is a Rule of Thumb
- It rests on one country's market history over one stretch of time
- It assumes you hold a specific stock and bond mix and rebalance it
- Fees, platform charges and taxes were not deducted
- Retiring for 40 or 50 years is a different problem to a 30-year one
Sequence-of-Returns Risk
A steady 7% every year is kind to a retiree. Real markets are not. If a deep fall lands in the first few years, withdrawals sell units at depressed prices and the portfolio may never recover, even if the long-run average matches your input. This is why two retirees with identical average returns can end up with wildly different outcomes, and why the downside check above matters more than the headline result.
Making a Rate Safer
- Start lower, near 3.0% to 3.5%, if retirement may run past 30 years
- Skip the inflation increase after a badly negative year
- Hold one to three years of spending in cash to avoid forced selling
- Cut fees: every 0.5% saved is real spending money over decades
- Count pensions and Social Security first, then withdraw the shortfall