Retirement Portfolio Withdrawal Calculator
Retirement Portfolio Withdrawal
Calculate sustainable withdrawal amounts from your retirement portfolio using various withdrawal rate strategies while accounting for inflation and investment returns.
Formula
First Year Withdrawal = Portfolio Balance x Withdrawal Rate; Each Year: Portfolio = Previous Balance x (1 + Return) - Inflation-Adjusted Withdrawal; Portfolio Lasts Until Balance Reaches Zero
Frequently Asked Questions
What is the 4 percent rule?
The 4 percent rule suggests withdrawing 4 percent of your portfolio in the first year of retirement, then adjusting that dollar amount for inflation each year. Research by William Bengen found this approach historically sustained portfolios for at least 30 years.
Is the 4 percent rule still valid?
Some financial planners now suggest a more conservative 3 to 3.5 percent rate due to lower expected future returns and longer retirements. Others argue that flexible spending strategies can support higher initial rates.
What happens if the market drops early in retirement?
Poor returns early in retirement, known as sequence-of-returns risk, can significantly impact portfolio longevity. A major market decline in the first few years of retirement can deplete a portfolio much faster than the same decline later.
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