Retirement withdrawal calculator

How this calculator works

This calculator projects how long a retirement portfolio may last under a constant annual return assumption while withdrawing an inflation-adjusted amount each year. You enter starting balance, first-year withdrawal, expected return, inflation rate, and planning horizon.

Each year, the model applies the return to the remaining balance, subtracts that year's withdrawal, then increases the next year's withdrawal by the inflation rate to maintain purchasing power. It reports ending balance after the horizon or the modeled year of depletion if the portfolio runs out sooner.

This is a deterministic stress test—not a recommendation of a safe withdrawal rate. Actual retirement portfolios experience uneven returns, fees, taxes, and spending changes. Poor returns early in retirement can deplete assets faster than the same average return spread differently across years. That sequence-of-returns risk is not captured here.

What affects the result

Portfolio longevity depends on the interaction of withdrawal size, returns, inflation, and time horizon.

• Starting balance — A $1 million portfolio supports larger withdrawals than $750,000 at the same rate and assumptions.
• First-year withdrawal rate — Withdrawing $40,000 from $1 million is a 4% starting rate. Higher initial withdrawals deplete assets faster, especially when combined with low returns or high inflation.
• Inflation rate — Rising withdrawals each year mean total distributions over 30 years can far exceed 30 × the first withdrawal. At 2% inflation, a $40,000 first-year withdrawal grows to roughly $72,000 by year 30.
• Assumed return — Higher constant returns extend portfolio life in the model. Reducing the return assumption by 1–2% often shows materially shorter survival.
• Planning horizon — A 25-year plan depletes less total wealth than a 35-year plan at the same withdrawal, even with identical first-year spending.
• Fees and taxes — Investment fees and taxes on withdrawals reduce net spendable income but are not fully modeled. Treat results as upper-bound optimism unless you adjust inputs downward.

Safe withdrawal rate research suggests flexibility matters as much as the starting percentage—cutting spending in down markets extends portfolio life significantly.

Real-world examples

1. Classic 4% starting point. A $1 million portfolio with a $40,000 first-year withdrawal (4%) at 6% return and 2% inflation may show a positive ending balance after 30 years in this simplified model. At 4% return, the same withdrawal may deplete the portfolio sooner.

2. Higher spending, shorter runway. $1 million with a $55,000 first-year withdrawal (5.5%) at 5% return and 3% inflation may deplete within 25 years depending on exact assumptions—illustrating why conservative planners use lower starting rates.

3. FIRE crossover check. If you reached FIRE with a $1.25 million target based on $50,000 spending at 4%, this calculator stress-tests whether that portfolio survives your chosen horizon under different return assumptions—complementing the FIRE calculator accumulation phase.

4. Inflation sensitivity. $1 million, $40,000 withdrawal, 6% return: at 2% inflation vs. 3% inflation, total withdrawals over 30 years differ by tens of thousands of dollars, changing ending balance materially.

Common mistakes

• Treating the modeled maximum as a safe recommendation. Historical safe rates depend on U.S. market history, portfolio mix, and flexibility not shown here.
• Ignoring taxes, investment fees, and healthcare costs. Gross portfolio withdrawals overstate spendable income in taxable accounts and before Medicare planning.
• Assuming a fixed average return eliminates sequence risk. A 6% average with bad early years performs worse than the same average with bad late years when withdrawals are fixed.
• Forgetting Social Security, pensions, or other income. Other income reduces portfolio withdrawal need but adds its own planning variables.
• Using today's spending without retirement adjustments. Travel, healthcare, and housing costs often shift at retirement.
• Planning to increase withdrawals with inflation without stress-testing lower returns. The combination of rising withdrawals and flat or negative return years is especially damaging.

When to use this calculator

Use this calculator to stress-test retirement spending against different return, inflation, and horizon assumptions before committing to a withdrawal strategy.

It helps compare a 3.5% vs. 4% vs. 4.5% starting withdrawal, see how a lower return assumption changes portfolio survival, and understand how inflation compounds withdrawal pressure over decades. Pair with the FIRE calculator for accumulation targets, the retirement projection calculator for pre-retirement growth, the inflation calculator for purchasing-power context, and the investment fee calculator to see how fees reduce sustainable withdrawals.

For high-stakes decisions, combine deterministic results with flexible spending rules and professional advice.

Related calculators

Estimate your FIRE accumulation target with the FIRE calculator. Project pre-retirement savings growth with the retirement projection calculator. Model purchasing power over time with the inflation calculator. Quantify how fees reduce ending balance with the investment fee calculator.