4% Rule Retirement Withdrawal Calculator

Enter the portfolio balance you intend to draw from when retirement begins. The calculator applies the withdrawal rate to that initial balance only. With the defaults of $1,000,000 and 4%, the first-year withdrawal is $40,000, or about $3,333 per month. The monthly figure is the annual amount divided by 12; the model actually withdraws once per year.

Set retirement age and life expectancy to define the projection period. For example, ages 65 to 95 produce 30 years. If life expectancy is at or below retirement age, the calculator still runs a minimum one-year projection, so correct the ages before interpreting the result. “Life expectancy” here is your planning endpoint, not an estimate calculated from mortality data. A longer endpoint tests the same spending plan over more years.

“Annual Return” is a single return applied every year to the balance after that year's withdrawal. Enter a nominal return after any fees you expect to pay. The advanced “Inflation Rate” raises the withdrawal amount by the same percentage each year. Keep return and inflation assumptions consistent: a nominal investment return belongs with a nominal inflation estimate. Neither input changes over time in this model.

The model takes the year's planned withdrawal at the start of the year, limits it to the available balance, grows the remainder by the entered annual return, and then increases next year's planned withdrawal for inflation.

First-year withdrawal = initial portfolio × withdrawal rate
Actual annual withdrawal = min(planned withdrawal, starting balance)
Year-end balance = (starting balance − actual withdrawal) × (1 + annual return)
Next planned withdrawal = current planned withdrawal × (1 + inflation rate)

At the default 2.5% inflation rate, a $40,000 first-year withdrawal becomes $41,000 in year two and $42,025 in year three. The dollar amount rises with inflation; it is not recalculated as 4% of the remaining portfolio. If the portfolio cannot cover the planned withdrawal, the model takes what remains, sets the balance to zero, and shows zero for later years.

The comparison table runs the same calculation at 3%, 3.5%, 4%, 4.5%, and 5%; it also includes your selected rate if it differs from those values. Its income column is the first-year amount for each rate. “Years Lasted” counts years completed before depletion or the full target period. A value shown with a plus sign means the balance was still positive at the planning endpoint; the tool does not project beyond it.

Start with the first-year annual withdrawal and ask whether it covers the spending gap after Social Security, pensions, and other reliable income. The retirement income calculator can help place those sources alongside portfolio withdrawals. Then compare “Years Covered” with the number of years between your retirement age and target age. The chart and year-by-year table show where the balance rises, falls, or reaches zero under your assumptions.

An ending balance is the projected nominal amount at the target age. It is not today's purchasing power, an inheritance estimate, or proof that you can safely spend more. A positive balance depends on receiving the entered return every year. Test lower returns, higher inflation, a longer life, and several withdrawal rates to see how sensitive the result is. For a spending plan with more detail, use the retirement withdrawal calculator.

The original 4% rule came from William Bengen's analysis of historical U.S. stock and bond returns and inflation over past retirement periods. That historical research differs from this tool's constant-return projection. Neither can guarantee future market results. Read Bengen's original research or our explanation of the 4% rule.

The tool does not model changing market returns, so it cannot show sequence-of-returns risk: a loss early in retirement can hurt a withdrawal plan more than the same loss late in retirement. It also does not calculate a historical success rate or a Monte Carlo probability. Use the Monte Carlo retirement calculator to explore variable-return scenarios, while remembering that those results also depend on their assumptions.

Withdrawals are shown before personal income taxes. Traditional IRA and 401(k) distributions are generally taxable, while Roth and taxable-account withdrawals follow different rules. If you need $40,000 to spend, you may have to withdraw more than $40,000 from pretax accounts. IRS: IRA distributions · IRS: 401(k) distributions. The 401(k) withdrawal tax calculator can help with a separate tax estimate.

The model also assumes no extra deposits, fees beyond what you include in the return, one-time expenses, changes in spending, or adjustments after a poor market year. It does not decide whether 4% is suitable for your asset mix or retirement length. If a fixed inflation-adjusted amount strains your plan, compare it with a more flexible withdrawal approach using the safe withdrawal rate calculator.