Retirement Withdrawal Calculator
You spent decades building the portfolio. This is the harder question: how much can you take out each year, and how long will it last? Model your drawdown with inflation-adjusted withdrawals and see the sustainable number.
A $1,000,000 portfolio withdrawing $40,000/year (a 4% rate), earning 5% with 3% inflation, lasts about 36 years. To make it last exactly 30 years you could withdraw roughly $44,300/year in today’s dollars. Push the rate to 6% ($60,000) and the money runs out in just 21 years — the withdrawal rate matters far more than the return.
Retirement Withdrawal Calculator
Your drawdown
Educational estimate. Assumes a constant return and steady inflation-adjusted withdrawals. Excludes taxes, Social Security, RMDs, and sequence-of-returns risk. Not financial advice.
Your results
4.0% withdrawal rateWithdrawals rise with inflation each year, so the dollar amount grows even though your spending power stays flat.
The single biggest driver of how long your money lasts is the withdrawal rate — the share of the portfolio you take in year one. Returns matter, but you don’t control them; your withdrawal rate you do.
What this calculator does
Accumulation is the easy half of retirement. Decumulation — turning a pile of assets into a paycheck that lasts as long as you do — is the harder problem, and the one most people plan for least. This calculator answers both sides of it: how many years your portfolio survives at your intended withdrawal, and what withdrawal is sustainable for the number of years you actually need.
Crucially, it increases your withdrawal with inflation every year, so the number represents constant purchasing power — the way real retirement spending works.
Who should use it
Anyone approaching or in retirement, early retirees stress-testing a long horizon, and advisors sanity-checking a client’s spending plan. It’s also useful long before retirement, to see what portfolio size your desired lifestyle actually requires.
This models a constant return and steady inflation-adjusted withdrawals. It excludes taxes on withdrawals, Social Security or pension income, required minimum distributions, and — most importantly — the variability of real markets. Use it to size the problem, then build in a margin of safety.
How drawdown math works
Each year two forces pull in opposite directions: your portfolio grows by its return, and shrinks by your withdrawal. If the return outpaces the withdrawal, the balance keeps rising and the money can last indefinitely. If the withdrawal outpaces growth, you begin eating principal — and the decline accelerates, because a smaller balance generates less growth.
Inflation is the quiet complication. A $40,000 withdrawal today must become roughly $53,800 in ten years at 3% inflation just to buy the same groceries. That’s why what matters isn’t your nominal return but your real return — return minus inflation. At 5% growth and 3% inflation, your portfolio is really only compounding at about 1.9%.
The formula
Choosing a withdrawal rate
Your withdrawal rate is your first-year withdrawal divided by your starting balance. It is the most powerful number in retirement planning:
| Rate | On $1M | Rough character |
|---|---|---|
| 3% | $30,000 | Very conservative — suits a 40–50 year early retirement |
| 4% | $40,000 | The classic rule; historically robust over 30 years |
| 5% | $50,000 | Aggressive; needs flexibility or a shorter horizon |
| 6%+ | $60,000+ | High depletion risk; typically unsustainable long-term |
The 4% rule comes from research showing that a 4% initial withdrawal, adjusted annually for inflation, survived 30 years in the large majority of historical periods. It’s a benchmark, not a law — a longer retirement argues for less, and a shorter one or a flexible budget can support more.
Worked examples
Example 1 — The classic 4% draw
$1,000,000, $40,000/yr, 5% return, 3% inflation.
The portfolio lasts about 36 years — comfortably past a standard 30-year retirement. To target exactly 30 years, you could raise the withdrawal to roughly $44,300. That gap is the cushion the 4% rule deliberately builds in.
Example 2 — Stretching to 6%
Same portfolio, $60,000/yr withdrawal.
Taking 50% more each year doesn’t cost you 50% of the timeline — it collapses it to just 21 years. Retire at 65 and you’d be out of money at 86, which is well within a modern life expectancy. This asymmetry is why the withdrawal rate deserves more attention than the return assumption.
Example 3 — A perpetual portfolio
$2,000,000, $50,000/yr (2.5%), 5% return, 3% inflation.
At a 2.5% withdrawal rate, growth outpaces the draw and the balance keeps climbing — the money effectively lasts indefinitely. This is the territory of legacy planning rather than depletion: you’re living off real growth and leaving the principal intact.
Sequence-of-returns risk
This calculator assumes a steady return, but markets don’t cooperate. Sequence-of-returns risk is the danger that poor returns arrive early in retirement, while you’re withdrawing. Selling assets in a downturn permanently removes shares that can’t participate in the recovery — so two retirees with identical average returns can have wildly different outcomes based purely on the order those returns arrived.
The common defenses: hold one to two years of spending in cash so you never have to sell into a crash; stay flexible, trimming withdrawals in bad years (guardrail strategies); and consider a bucket approach — near-term spending in cash and bonds, long-term money in equities.
Which account to draw from first
Withdrawal order can add years to your portfolio through tax efficiency. The conventional sequence:
- Taxable brokerage first. You’re only taxed on gains, often at favorable long-term capital gains rates, letting tax-advantaged accounts keep compounding.
- Tax-deferred next (traditional 401(k)/IRA). Taxed as ordinary income — draw strategically to fill lower brackets rather than spiking into high ones.
- Roth last. It grows tax-free and has no RMDs during your lifetime, making it the ideal final reserve and the best asset to leave to heirs.
The nuance: in low-income early-retirement years, deliberately withdrawing from — or converting — tax-deferred accounts at low rates can beat leaving it all to be taxed later at higher rates alongside RMDs.
RMDs and taxes
Beginning at age 73, the IRS requires required minimum distributions from traditional 401(k)s and IRAs whether you need the money or not, calculated from your balance and life expectancy. Miss one and the penalty is steep. Roth IRAs have no RMDs for the original owner.
Remember too that this calculator’s withdrawals are pre-tax for traditional accounts. If you need $40,000 to spend and you’re in a 22% bracket, you may need to withdraw closer to $51,000 from a traditional IRA. Roth withdrawals, by contrast, are tax-free — so build your real spending need on an after-tax basis.
Common mistakes
- Ignoring inflation. A flat withdrawal loses roughly half its purchasing power over 24 years at 3% inflation. Your draw must grow.
- Forgetting taxes. Traditional account withdrawals are taxed as income — your gross withdrawal must exceed your spending need.
- Assuming steady returns. Real markets are volatile, and early losses hurt disproportionately. Keep a cash buffer.
- Being rigid. Retirees who trim spending modestly in down years dramatically improve portfolio survival versus those who withdraw mechanically.
- Applying the 4% rule to a 45-year retirement. It was validated over 30 years; longer horizons need 3–3.5%.
- Overlooking Social Security. Guaranteed income reduces what the portfolio must provide — factor it in and your sustainable withdrawal looks better.
Frequently asked questions
How long will my retirement savings last?
What is a safe withdrawal rate?
What is the 4% rule?
Do withdrawals increase with inflation?
Which accounts should I withdraw from first?
What are RMDs?
Does this include taxes?
What is sequence-of-returns risk?
Should I include Social Security?
What if the market crashes right after I retire?
Is this financial advice?
Goes deeper on this
The FIRE Movement: Path to Early Retirement
The number, the math, and the tax machinery to buy back your time — decades before a traditional retirement.
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