Updated · Built and checked by the PlinzoTools team, formulas tested against published sources
Calculate a sustainable annual and monthly withdrawal from your retirement savings at a safe withdrawal rate.
Once you've accumulated a retirement nest egg, the next question is how much you can safely withdraw each year without running out of money -- the "decumulation" phase, a genuinely different question from any accumulation-phase growth projection. This calculator applies a chosen safe withdrawal rate (commonly 4%, based on historical research) to your nest egg.
Enter your total retirement nest egg and your chosen withdrawal rate (4% is a commonly cited starting point, though some prefer 3-3.5% for extra safety margin).
Annual Withdrawal = Nest Egg × Withdrawal Rate %
The "4% rule" comes from historical research (the Trinity study and similar) testing a roughly 30-year retirement horizon against historical market returns -- it's a useful starting heuristic, not a guarantee, and a longer retirement, poor early-retirement market returns, or high fees can all affect real sustainability.
For the inverse question -- how large a nest egg you need to support a specific desired spending level -- see the FIRE Calculator instead.
The clearest way to use this tool is to try several rates on the same nest egg. Using a hypothetical $800,000 portfolio: at 3% the first-year withdrawal is $24,000, at 3.5% it is $28,000, at 4% it is $32,000, and at 5% it is $40,000. Each half percentage point is worth $4,000 a year here, which is real spending money. But the higher the rate, the greater the chance that the portfolio runs short if markets do poorly early in retirement. Seeing the dollar tradeoff makes the safety margin concrete.
A retiree who withdraws money during a market decline sells more shares to fund the same spending, leaving fewer shares to recover later. This is known as sequence-of-returns risk. The calculator cannot model it, since it shows a single first-year figure, but it is the main reason people choose a cushion below the headline rate. Some retirees hold a cash reserve for a year or two of spending, or reduce withdrawals after a poor market year, to soften the effect.
The result is a first-year withdrawal, not a guaranteed lifetime paycheck. Real portfolios rise and fall, spending changes over time, and fees reduce returns. Required minimum distributions from certain accounts may force larger withdrawals later, and their rules are set by the IRS, so check IRS.gov for current requirements.
Also note that a longer retirement usually calls for a more cautious rate than a shorter one. If you are retiring in your fifties or earlier, consider testing 3 to 3.5% alongside 4%.
A fee-only financial planner can run more detailed simulations that account for market variation, taxes, and your specific spending pattern.
It's a widely cited starting point, but a longer retirement (early retirees especially), different market conditions, or a desire for extra safety margin can justify a lower rate like 3-3.5%.
The original research behind the 4% rule assumed the dollar withdrawal amount increases with inflation each year to maintain purchasing power -- this calculator shows the first year's withdrawal only, not the full inflation-adjusted schedule.
The calculator shows year one only. In later years, a common approach is to raise the prior year's dollar amount by inflation instead of recalculating from the current balance.
Some retirees trim spending temporarily. Others keep a cash buffer to avoid selling in a downturn. A planner can help set rules in advance.
Usually not, unless you plan to sell it and invest the proceeds. A home you live in does not produce withdrawable income.
No. It improves the odds but cannot guarantee anything, since future returns, inflation, and lifespan are unknown.
Reference: Social Security Administration