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Safe Withdrawal Rate Calculator

See how much retirement income a portfolio supports.

How it is calculated

The tool multiplies the portfolio by a withdrawal rate: annual = portfolio × rate / 100 and monthly = annual / 12. Portfolio is the current invested balance and rate is the share withdrawn in the first year, in percent (3.5 means 3.5%). If the rate is left empty, zero or negative, the tool falls back to 4%, so it never shows a 0% result. A portfolio of zero is allowed; a negative one gives no result. Results are in USD with two decimals. This is a flat calculation: it does not adjust for inflation in later years, taxes, fees or investment returns, so the figure is a starting income, not a guarantee.

Worked example

A portfolio of 1000000 and a chosen withdrawal rate of 3.5%. Annual income: 1000000 × 3.5 / 100 = $35,000.00. Monthly income: 35000 / 12 = $2,916.67. For comparison, leaving the rate at the default 4% would give $40,000.00 a year ($3,333.33 a month) from the same portfolio.

Try this example →

Common mistakes

  • Typing 0 for the rate and expecting zero income. The tool then silently uses 4%, so the result looks like a 4% withdrawal.
  • Entering the rate as a decimal (0.04). That is read as 0.04%, which gives a tiny income; type 4.
  • Treating the result as pre-tax spending money. Taxes on withdrawals and investment fees are not subtracted.
  • Reading the figure as a rule for every year. The rate is meant for the first year; later years are usually adjusted for inflation, which this tool does not show.
  • Including a home you live in or other non-investable assets in the portfolio value.

Sources

About this calculator

This calculator applies a safe withdrawal rate — most famously the 4% rule from William Bengen's 1994 research and later the Trinity Study — to a portfolio balance to estimate the annual and monthly income it can sustainably generate without running out of money over a typical 30-year retirement. The math is a simple multiplication (balance × rate), but the rate itself comes from historical analysis of stock and bond returns across worst-case retirement start dates, including years with poor market timing.

People planning early retirement (the FIRE movement), financial advisors modeling client drawdown plans, and pre-retirees deciding how large a nest egg they need use this to translate a lump-sum savings goal into a livable income figure, or work backward from a target income to the portfolio size required.

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Comments (1)

  • Editorial team

    The rate you pick moves the income more than most people expect. On a portfolio of 1,000,000, a 3.5 percent rate gives 35,000 a year or 2,916.67 a month, while 4 percent gives 40,000 and 3,333.33. Longer retirements are the usual reason to test lower rates. The figure is only a first-year starting point; an adviser can speak to your own tax and risk situation. Which rate and time horizon are you testing?

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