Safe Withdrawal Rate Calculator
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4%
$
Sustainable Annual Withdrawal$40,000.00
Monthly Withdrawal$3,333.33
Portfolio Needed for Spending Goal$1,500,000.00
The safe withdrawal rate (SWR) is the share of a retirement portfolio you can spend each year with a high chance of not running out. This tool multiplies your portfolio by the rate you choose to give a sustainable annual and monthly draw, and works the calculation in reverse to show the portfolio you would need to support a target level of spending.
Formula
annualWithdrawal = portfolio × (SWR / 100); portfolioNeeded = spendingGoal / (SWR / 100)
- portfolio
- Total invested portfolio value
- SWR
- Safe withdrawal rate as a percent (e.g. 4)
- spendingGoal
- Desired annual spending in retirement
How it works
- Enter your current portfolio value and pick a safe withdrawal rate; the popular "4% rule" comes from research on 30-year retirements.
- The calculator multiplies the portfolio by the rate to get the sustainable yearly withdrawal, then divides by twelve for the monthly figure.
- Enter an annual spending goal and the tool divides it by the rate to show the portfolio you would need to fund that spending at the chosen withdrawal rate.
Worked example
A retiree holds a $1,000,000 portfolio and applies the 4% rule.
- Annual withdrawal = 1,000,000 × 0.04 = $40,000.
- Monthly withdrawal = 40,000 ÷ 12 = $3,333.33.
- To instead fund $60,000 a year, portfolio needed = 60,000 ÷ 0.04 = $1,500,000.
A $1M portfolio supports $40,000 a year ($3,333.33 monthly) at 4%.
Frequently asked questions
- What is the 4% rule?
- It is a guideline from the Trinity Study suggesting that withdrawing 4% of your starting portfolio in year one, then adjusting for inflation, historically lasted at least 30 years in most scenarios.
- Is a 4% withdrawal rate always safe?
- No. It was derived from historical US returns over 30-year periods. Longer retirements, lower expected returns, or poor early-year market performance can call for a lower rate such as 3% to 3.5%.
- Does this calculator account for inflation or taxes?
- It computes the nominal withdrawal at the rate you enter. It does not model inflation adjustments, taxes, or market sequence risk, so treat the result as a planning baseline rather than a guarantee.