The “4% rule” says withdrawing 4% in year one and raising it with inflation has historically lasted 30 years. Flexible spending – cutting back after bad market years – makes savings last longer.
How to use the Retirement Withdrawal Calculator
- Savings at retirement
- Years the money should last
- Expected annual return
- Inflation
- Or: first-year withdrawal to test
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter your savings at retirement, the years the money must last, the expected return, inflation and, optionally, a withdrawal amount to test.
Tips
- Start early – time does more of the work than the amount you save.
- Take the full employer match if your plan offers one.
- Plan with a cautious return (4–6% after inflation) and check again every year.
- Know the contribution limits and required minimum distribution rules for your accounts.
Common mistakes to avoid
- Ignoring inflation when setting a retirement target.
- Underestimating how long retirement can last.
- Withdrawing early and paying penalties and taxes.
Inputs explained
| Field | What to enter |
|---|---|
| Savings at retirement | Amount in your currency |
| Years the money should last | A number |
| Expected annual return | In % |
| Inflation | In % |
| Or: first-year withdrawal to test | Amount in your currency |
What each result means
- Sustainable first-year withdrawal = [Savings at retirement]÷gpv([Expected annual return]÷100, [Years the money should last], 1, [Inflation]÷100, 1)
- Per month (first year) = [Sustainable first-year withdrawal]÷12
- Withdrawal rate = [Sustainable first-year withdrawal]÷[Savings at retirement]×100
- Final-year withdrawal = [Sustainable first-year withdrawal]×(1 + [Inflation]÷100)^([Years the money should last] – 1)
Example values
How the main result changes when Savings at retirement changes and everything else stays at the example values above:
| Savings at retirement | Sustainable first-year withdrawal |
|---|---|
| 400,000 | 18,504.69 |
| 600,000 | 27,757.03 |
| 800,000 | 37,009.37 |
| 1,000,000 | 46,261.71 |
| 1,200,000 | 55,514.06 |
| 1,600,000 | 74,018.74 |
Formula
First withdrawal = balance ÷ growing-annuity factor = B × (r − g) ÷ ((1 − ((1 + g) ÷ (1 + r))^n)(1 + r)) (withdrawals at the start of each year)Duration of a fixed real withdrawal: years until the balance reaches zeroWorked example
Inputs — Savings at retirement: $800,000; Years the money should last: 30; Expected annual return: 5 %; Inflation: 2.5 %; Or: first-year withdrawal to test: $40,000.
Results — Sustainable first-year withdrawal = $37,009.37; Per month (first year) = $3,084.11; Withdrawal rate = 4.63 %; Final-year withdrawal = $75,736.25; Total withdrawn = $1,624,811.43; How long the tested withdrawal lasts = 26.8 years.
Frequently asked questions
How much can I withdraw from retirement savings?
About 4% in the first year, then adjust for inflation, for a 30-year retirement.
What if markets fall early in retirement?
Sequence risk – reduce withdrawals temporarily or keep a cash buffer.
Should withdrawals rise with inflation?
Yes, to keep the same buying power.
What formula does the Retirement Withdrawal Calculator use?
First withdrawal = balance ÷ growing-annuity factor = B × (r − g) ÷ ((1 − ((1 + g) ÷ (1 + r))^n)(1 + r)) (withdrawals at the start of each year).