The safe withdrawal rate calculator shows how long your retirement portfolio will last based on withdrawal amount, return, and inflation. Compare common withdrawal rates (3%–5%) and see the required portfolio size for your desired retirement income.
Understanding Safe Withdrawal Rates
The 4% rule was developed from the Trinity Study, which analyzed historical 30-year retirement periods. At a 4% initial withdrawal rate (adjusted for inflation), portfolios survived 95%+ of historical scenarios with a 60/40 allocation. However, today's lower bond yields and potential market valuations have led many planners to suggest 3-3.5% for safety.
Sequence of Returns Risk
The biggest threat to a retirement portfolio isn't average return — it's sequence. Retiring into a bear market (2000, 2008) and withdrawing simultaneously is far more damaging than the same average return over a different sequence. Having 1-2 years of expenses in cash reduces forced selling during downturns.
FAQ
What is the 4% rule?
The 4% rule states that if you withdraw 4% of your portfolio in year one and adjust for inflation annually, your portfolio has historically lasted 30+ years. Based on the Trinity Study (1998), which tested historical US market returns. Many planners now use 3.5% for longer retirements (40+ years).
What portfolio return should I assume?
For real (inflation-adjusted) returns, most historical analyses use 4-5% for a 60/40 stock/bond portfolio. Nominal returns are typically 6-8%. Use real returns if you're adjusting withdrawals for inflation; use nominal if your withdrawals are fixed dollar amounts.
At what rate does the 4% rule fail?
The 4% rule has historically failed most often when: retiring into a severe bear market (sequence of returns risk), holding too conservative a portfolio (bonds drag returns), or planning for a 40+ year retirement. Many planners recommend a 3-3.5% rate for early retirees.
How do I calculate my FIRE number?
FIRE Number = Annual Expenses × 25 (for 4% rule) or × 28.6 (for 3.5% rule) or × 33.3 (for 3% rule). So $60,000/year in expenses requires a $1.5M portfolio at the 4% rule. Add a 10-20% buffer for flexibility and unexpected expenses.