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Retirement Withdrawal Calculator

Find out how long your money lasts at any withdrawal rate, see what sequence-of-returns risk does to the same average return, and get a Monte Carlo success rate across 1,000 market scenarios.

Spend Your Savings Without Outliving Them

Where the 4% Rule Comes From

The rule: Withdraw 4% of your portfolio in year one, then raise that dollar amount with inflation every year regardless of what markets do. Financial planner William Bengen tested this against every 30-year period of US returns since 1926 and published the result in 1994. The Trinity study repeated the exercise in 1998 with a wider set of allocations and reached the same conclusion.

The fine print: The 4% figure assumed a 30-year retirement, a portfolio holding 50-75% stocks, US historical returns, and no fees or taxes. It was the worst-case starting rate that survived the 1929 crash and the 1966-1982 stagflation years. In most other periods a retiree could have spent far more.

Key Insight: The 4% rule is a stress-test survivor, not a forecast. Run your own numbers through the Fixed Return tab first, then the Monte Carlo tab. If the two answers look very different, sequence-of-returns risk is the reason.

Sequence of Returns Risk, Explained

While you are saving, the order of returns does not matter: a 20% loss followed by a 20% gain ends in the same place as the reverse. Once you start withdrawing, order is everything. A bad year early forces you to sell more shares at low prices to fund the same spending, and those shares are gone when the recovery arrives.

A worked example: Take $1 million, $40,000 a year rising with 3% inflation, and 30 years of returns that average exactly 6%. Put the worst years first and the money is gone in about 14 years. Put the best years first and the retiree dies with roughly $2.9 million. Same average, same withdrawals, opposite outcomes. The Sequence Risk tab shows this with your own inputs.

The danger window is the first five to ten years of retirement. A 30% drop in year 25 is a nuisance; the same drop in year two can be fatal to the plan.

Reality Check: The average return in a brochure tells you nothing about whether your plan survives. Two retirees with identical portfolios who retire two years apart can have completely different results, and neither of them did anything wrong.

Fixed Rate vs. Dynamic Withdrawal Rules

Fixed real withdrawals (the 4% rule): Simple and predictable, but blind to markets. It is the most likely rule to fail in a bad sequence and the most likely to leave a huge unspent balance in a good one.

Guardrails (Guyton-Klinger): Start at a higher rate, around 5%, and set two tripwires. If the current withdrawal rate drifts 20% above the starting rate after a market fall, cut spending by 10%. If it drifts 20% below after a rally, give yourself a 10% raise. Skip the inflation adjustment in any year the portfolio lost money. Retirees who can tolerate a variable income can safely start higher.

Percentage of balance (RMD-style): Withdraw a fixed percentage of whatever the portfolio is worth each year, the way required minimum distributions work. The money can never run out, but income swings with the market, which many households cannot absorb.

Buckets and cash reserves: Hold two to three years of spending in cash and short-term bonds, spend from that bucket in down years, and refill it from stocks after recoveries. Buckets do not change the math, but they stop you from selling stocks at the bottom, which is the behavior that turns a bad sequence into a ruined plan.

Pro Strategy: Combine them. Use a modest fixed rate for essential spending, guardrails for discretionary spending, and a two-year cash bucket so a crash in year one never forces a sale. Test the essential-spending rate in the Monte Carlo tab and aim for a 90% success rate.

Social Security Is Your Biggest Lever

Every dollar of guaranteed, inflation-adjusted income is a dollar your portfolio does not have to produce. Delaying Social Security from 62 to 70 raises the monthly check by roughly 77%, and that larger check is protected from both markets and inflation for life.

Spending down the portfolio faster in the early years to fund the delay feels backwards, but the Monte Carlo tab usually shows it improves the success rate. Enter your expected benefit in the "Other annual income" field and the year it starts to see the effect. A pension or rental income works the same way.

Try This: Run your plan with benefits starting in year 1, then again with benefits 25-30% larger starting in year 3 or 4. The second version almost always wins on success rate, even though the portfolio takes a bigger hit early.

Avoid These Costly Mistakes

  • ❌ Planning on the average return and ignoring the range of outcomes
  • ❌ Treating 4% as safe for a 40-year early retirement (it was tested on 30)
  • ❌ Forgetting that a 1% advisory fee or fund expense comes straight out of your withdrawal rate
  • ❌ Claiming Social Security at 62 to "protect the portfolio" when the math usually runs the other way
  • ❌ Selling stocks in a crash to fund spending instead of drawing from a cash bucket
  • ❌ Never revisiting the plan: a rate that was safe at 65 may be generous or dangerous at 75

Your Withdrawal Plan Action Steps

  1. Split spending into essential and discretionary; only the essential part needs a high success rate
  2. Enter your balance, first-year withdrawal, and guaranteed income in the calculator
  3. Check the Fixed Return tab for the simple answer, then the Monte Carlo tab for the honest one
  4. If success is below 85%, test a lower withdrawal, delayed Social Security, or a later retirement date
  5. Set aside two to three years of spending in cash before you retire
  6. Re-run the plan every year and adjust spending with a guardrail rule, not by guesswork

Frequently Asked Questions

At $40,000 a year rising 3% with inflation and a steady 6% return, $1 million lasts the full 30 years with about $1.06 million still in the account. Raise the withdrawal to $50,000 and it runs out in year 29; at $60,000 it lasts about 22 years. With zero growth, $40,000 inflating at 3% drains $1 million in just under 19 years. The Monte Carlo tab shows that the same $40,000 plan succeeds in only about 65% of simulated markets at 6% average return and 12% volatility, which is why the average-return answer alone is not enough.
The 4% rule says you can withdraw 4% of your portfolio in the first year of retirement, raise that dollar amount with inflation each year, and have historically survived 30 years with a 50-75% stock allocation. It comes from William Bengen's 1994 study of US returns since 1926 and was confirmed by the Trinity study in 1998. It is a planning benchmark, not a guarantee: it assumes a 30-year horizon, US historical returns, and no fees or taxes.
Sequence of returns risk is the danger that poor market years land early in retirement, when withdrawals lock in losses the portfolio never recovers from. Two retirees can earn the exact same average return and end up with wildly different outcomes depending on the order. In this calculator's default example, the same 30 returns averaging 6% either exhaust $1 million in about 14 years (bad years first) or leave $2.9 million (good years first).
Most planners now put the safe starting rate between 3.5% and 4% for a 30-year retirement, with Morningstar's 2025 research landing at 3.9% for a balanced portfolio. Longer retirements, high fees, or a heavy bond allocation push the number lower; flexibility to cut spending in bad years pushes it higher. Use the Monte Carlo tab to see how your own rate performs, and aim for a success rate of 85-90% or better.
A Monte Carlo simulation runs your retirement plan through hundreds or thousands of randomly generated market paths and reports the share that never run out of money. This calculator draws 1,000 sequences of annual returns from a normal distribution with the average return and volatility you enter. A 90% success rate means 900 of the 1,000 paths lasted the full period. It captures the range of outcomes a single average-return projection hides.
Every dollar of guaranteed income replaces a dollar the portfolio has to produce, so Social Security can lift a plan from failing to comfortable. In the calculator's success story, adding $18,000 a year of benefits starting in year 3 raised a $900,000 plan's success rate from 52% to 93%. Delaying benefits from 65 to 67 or 70 buys a larger inflation-protected check for life, which is one of the cheapest ways to reduce sequence-of-returns risk.

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