Retirement Withdrawal Calculator
The 4% rule states you can withdraw 4% of your retirement portfolio in year one — then adjust for inflation — with a high probability your savings last 30 years. This calculator shows how long your savings last at any withdrawal amount.
Enter your retirement balance, annual withdrawal amount, and expected return to see how many years your savings will last, the most you could withdraw and still reach your target number of years, and a year-by-year balance schedule.
| Year | Start Balance | Withdrawal | Growth | End Balance |
|---|
How the 4% Rule Works — and When to Adjust It
The 4% rule emerged from William Bengen's landmark 1994 research analyzing historical U.S. stock and bond returns from 1926 to 1994. He found that a retiree who withdrew 4% of their initial portfolio in year one — then adjusted that dollar amount for inflation each year — had enough money to last at least 30 years across every 30-year window in that data set. A $1,000,000 portfolio supports $40,000/year at the 4% rate.
This calculator models the core concept: your portfolio grows at the expected return, withdrawals reduce it annually (with optional inflation adjustments), and the simulation runs until the balance hits zero or 60 years — whichever comes first. It also works the problem backwards: given the number of years your money must last, it finds the largest first-year withdrawal that still leaves something in the account at the end of that period.
Two forces are at work. Returns grow the balance and withdrawals shrink it. While the return on the balance exceeds what you take out, the portfolio holds steady or grows; once rising, inflation-adjusted withdrawals overtake the return, the balance starts falling and the decline speeds up each year.
Why Your Withdrawal Rate Is the Most Important Variable
The difference between a 4% and a 5% withdrawal rate sounds small — but over 30 years it's enormous. On a $1,000,000 portfolio earning 6%, with withdrawals rising 2.5% a year for inflation, a 4% start ($40,000) lasts about 62 years. Start at 5% and the money runs out in about 36 years; start at 6% ($60,000) and it is gone in about 27. Each extra percentage point costs roughly a decade. The math is unforgiving because withdrawals are linear while compound growth is exponential — high withdrawal rates permanently prevent compounding from doing its job.
The Sequence-of-Returns Problem
This calculator uses a fixed return rate, but real retirement returns vary year to year. Sequence-of-returns risk is the danger that a major market downturn early in retirement permanently damages your portfolio. A 30% drop in year two of retirement, combined with ongoing withdrawals, reduces the balance so much that even a strong recovery can't repair the damage. This is why holding 1–2 years of expenses in cash and bonds — so you can avoid selling equities during downturns — is one of the most valuable retirement strategies.
| Annual Withdrawal | Withdrawal Rate | Savings Last | Assessment |
|---|---|---|---|
| $30,000/yr | 3.0% | Indefinitely | Portfolio grows |
| $40,000/yr | 4.0% | 60+ years | Standard safe rate |
| $50,000/yr | 5.0% | ~36 years | Use with caution |
| $60,000/yr | 6.0% | ~27 years | Risky for long retirement |
| $80,000/yr | 8.0% | ~18 years | Likely to run short |
Strategies to Make Savings Last Longer
- Reduce spending in down years: Even small reductions (10–15%) in bad market years significantly extend portfolio life.
- Delay Social Security to 70: A higher guaranteed monthly benefit reduces how much you need to pull from savings — and protects you in a long retirement.
- Use a Roth conversion strategy: Roth IRA withdrawals don't count as income, helping manage tax brackets and Medicare costs in retirement.
- Maintain a cash buffer: 1–2 years of expenses in high-yield savings avoids selling equities at depressed prices during downturns.
- Floor-and-upside: Cover essential expenses with guaranteed income (Social Security, a pension or an annuity) and draw on the portfolio only for discretionary spending, which you can trim when markets fall.
For how the order of returns can undo an otherwise sound plan, read Sequence of Returns Risk. For context on how much you need to save before you retire, see The 4% Rule Explained: How Long Will Your Money Last? or read How Much Money Do You Need to Retire? for a comprehensive planning guide.
Related Reading
Also see: RMD Calculator for required IRS withdrawals, or Retirement Calculator to project how much you'll have saved by retirement.
Frequently Asked Questions
What is the 4% rule?
The 4% rule is a retirement withdrawal guideline that says you can withdraw 4% of your portfolio in year one of retirement, then adjust that amount for inflation each year, with a high probability your money lasts 30 years. It was developed by financial planner William Bengen in 1994 using historical U.S. market data. A $1,000,000 portfolio supports $40,000/year in withdrawals under this rule.
Is the 4% rule still valid?
The 4% rule remains a widely used starting point, but some financial researchers now suggest 3.3–3.5% may be safer given lower expected future returns and potentially longer retirements. If you retire at 60 and live to 95, you need a 35-year horizon, which may require a lower withdrawal rate. Use this calculator to test different rates and see how they affect your runway.
How long will $1 million last in retirement?
With a 6% return and withdrawals that rise 2.5% a year for inflation, $40,000 a year (4%) lasts about 62 years, $50,000 (5%) about 36 years, $60,000 (6%) about 27 years and $80,000 (8%) about 18 years. The most you could start at and still last exactly 30 years is about $55,000. A lower return shortens every figure, so enter your own numbers above.
Should I increase withdrawals for inflation?
Raising withdrawals each year keeps your spending power level but drains the portfolio faster, especially when inflation runs high. Fixed withdrawals last longer on paper but buy less every year. A common middle ground is to raise withdrawals by only part of inflation, or to cover essential spending with inflation-adjusted income such as Social Security and keep portfolio withdrawals flexible. Set the inflation field to 0 to see a fixed-withdrawal plan.
What return rate should I use in retirement?
In retirement, most financial planners use a more conservative return assumption than during accumulation — typically 5–6% nominal for a balanced stock/bond portfolio. A 60/40 stock/bond allocation has historically returned about 8–9% nominally. Use 5% as a conservative baseline, 7% for a more aggressive equity-heavy portfolio.
How much do I need to retire on $50,000/year?
Using the 4% rule, you need $50,000 ÷ 0.04 = $1,250,000 in savings. At a 3.5% withdrawal rate (more conservative), you need $1,428,571. Social Security and pension income reduce how much you need to withdraw from savings — subtract those from your annual spending before applying the rule.
What happens if I withdraw too much from retirement savings?
Withdrawing too much, especially early in retirement during a market downturn (sequence-of-returns risk), can permanently deplete your portfolio. Once your balance declines sharply early on, there is less principal to recover gains on during rebounds. Strategies include maintaining 1–2 years of expenses in cash, reducing withdrawals in down years, or maintaining guaranteed income through Social Security.
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Sources & method
This calculator implements IRS distribution rules for retirement accounts.
Source: IRS Publication 590-B (verified 4 September 2026)
Not financial or tax advice. This is an educational estimator. It does not know your full situation, and tax rules change. Akshaya Panda, who builds and verifies these tools, is an engineer — not a financial adviser, accountant, or tax professional. Before acting on a result that matters, check it with someone licensed to advise you.