Safe Withdrawal Rate Calculator
The Safe Withdrawal Rate Calculator shows a sustainable annual draw you can take from an investment portfolio without running out of money too soon. It’s most useful when you’re planning retirement cash flow, stress-testing the classic “4% rule,” or tailoring withdrawals to your horizon, risk tolerance, and asset mix so spending can stay steady through market ups and downs.
This tool lets us translate portfolio size, time frame, and guardrails into a practical spending target and monthly paycheck. The goal is confidence—balancing longevity and sequence-of-returns risk with the lifestyle you want—so you can set expectations, adjust contributions or retirement age, and revisit the plan as markets and goals evolve.
Sustainable withdrawals vs portfolio — enter your portfolio, SWR, years, and inflation. We show the starting annual and monthly withdrawals with notes on longevity and inflation risk.
We estimate a starting withdrawal using your safe withdrawal rate (SWR) applied to today’s portfolio. Then we index withdrawals to inflation each year and summarize the implications for your horizon.
Inflation indexing snapshot
| Year | Withdrawal (nominal) | Cumulative |
|---|---|---|
| 1 | $40,000.00 | $40,000.00 |
| 2 | $41,000.00 | $81,000.00 |
| 3 | $42,025.00 | $123,025.00 |
| 4 | $43,075.62 | $166,100.63 |
| 5 | $44,152.52 | $210,253.14 |
| 6 | $45,256.33 | $255,509.47 |
| 7 | $46,387.74 | $301,897.21 |
| 8 | $47,547.43 | $349,444.64 |
| 9 | $48,736.12 | $398,180.75 |
| 10 | $49,954.52 | $448,135.27 |
| 11 | $51,203.38 | $499,338.65 |
| 12 | $52,483.47 | $551,822.12 |
| 13 | $53,795.55 | $605,617.67 |
| 14 | $55,140.44 | $660,758.11 |
| 15 | $56,518.95 | $717,277.07 |
| 16 | $57,931.93 | $775,208.99 |
| 17 | $59,380.22 | $834,589.22 |
| 18 | $60,864.73 | $895,453.95 |
| 19 | $62,386.35 | $957,840.30 |
| 20 | $63,946.01 | $1,021,786.30 |
| 21 | $65,544.66 | $1,087,330.96 |
| 22 | $67,183.27 | $1,154,514.24 |
| 23 | $68,862.86 | $1,223,377.09 |
| 24 | $70,584.43 | $1,293,961.52 |
| 25 | $72,349.04 | $1,366,310.56 |
| 26 | $74,157.76 | $1,440,468.32 |
| 27 | $76,011.71 | $1,516,480.03 |
| 28 | $77,912.00 | $1,594,392.03 |
| 29 | $79,859.80 | $1,674,251.83 |
| 30 | $81,856.30 | $1,756,108.13 |
This schedule models constant inflation and does not simulate market returns, taxes, or fees. Real outcomes vary.
Results interpretation
How it works
We calculate a starting withdrawal using SWR × Portfolio, then apply a simple inflation escalator across the chosen horizon.
Formulas, assumptions, limitations
Starting withdrawal. W₀ = Portfolio × SWR.
Monthly amount. W₀ ÷ 12.
Inflation indexing. Year t withdrawal: W₀ × (1 + i)^(t−1), where i is inflation.
Total withdrawals. If i ≠ 0: W₀ × ((1+i)^n − 1)/i; if i = 0: W₀ × n.
Risk framing. Higher inflation and longer horizons require more portfolio growth to sustain the same purchasing power.
Scope. This tool doesn’t model returns, volatility, sequence risk, taxes, fees, or glidepaths. Use it as a planning aid.
Use cases & examples
Portfolio $1,000,000, SWR 4%, inflation 2.5%, 30 years → W₀ = $40,000/yr ($3,333/mo). The model shows how that grows with inflation and the nominal total over 30 years.
If we use SWR 3.5% for a 40-year horizon, the starting amount is lower but leaves more margin for bad sequences and higher inflation.
At 5% inflation, withdrawals double in ~14.2 years. The nominal total balloons—an important reminder to revisit plans if inflation stays elevated.
Safe withdrawal FAQs
What SWR should we choose?
Many planners start near 4% for ~30 years, lower for longer horizons or more conservative assumptions. Try 3%–5% to see sensitivity.
Are withdrawals adjusted for inflation?
Yes. We escalate the prior year’s amount by your inflation input to keep purchasing power steady in nominal terms.
Does this include market returns?
No. This is a cash-flow scaffold. To explore portfolio paths and sequence risk, use our retirement or FIRE tools with returns modeling.
How do taxes and fees affect this?
Taxes and fees reduce what you can withdraw or require a lower SWR. Consider net-of-tax needs and account types.
Can we switch to a guardrail method?
Guardrails adjust withdrawals based on market performance. This tool uses a simple constant-real-withdrawal approach; guardrails generally reduce failure risk.
What if inflation is volatile?
Our model assumes constant inflation. For realism, test several inflation values and revisit yearly.
Designing sustainable withdrawals: a practical guide
Safe withdrawal rate (SWR) planning takes an uncertain future and turns it into a simple yearly paycheck target. We start with a first-year withdrawal from our portfolio and then raise that paycheck by inflation each year to maintain purchasing power. The details—horizon, inflation, and risk tolerance—shape the plan’s resilience.
Start with needs, not numbers
The best withdrawal plan begins with spending: housing, food, healthcare, travel, giving, and a buffer for the unknown. Once we estimate needs in today’s dollars, we can map them to a portfolio using an SWR. Lower spending shrinks the target dramatically, which is often the most controllable lever.
Why SWR works as a rule of thumb
An SWR encodes the trade-off between enjoying money today and keeping enough invested to last. Historical research (e.g., studies inspired by Bengen and the Trinity authors) examined how fixed real withdrawals fared across rolling periods of returns and inflation. The headline takeaway: a moderate starting rate, raised with inflation, often survived 30-year retirements in the data.
Horizon matters
Longer retirements demand lower starting rates. A 25-year plan is more forgiving than a 40-year plan. If our horizon is open-ended or we want to hedge conservatively, we can drop the SWR, trim spending, or plan for flexible withdrawals in weak markets.
Inflation is the silent force
Inflation quietly doubles withdrawals over time. At 3% inflation, a $40,000 withdrawal becomes about $80,000 after 24 years. Because markets and inflation dance unpredictably, revisiting assumptions annually keeps the plan aligned with reality.
Guardrails and flexibility
Fixed real withdrawals are simple but rigid. Guardrail systems raise or lower withdrawals after big market moves, keeping the plan inside a safe band. Another approach uses a floor-and-ceiling adjustment or a percentage-of-portfolio rule with caps. Any of these inject flexibility, which often beats precision during turbulent decades.
Tax location and sequence risk
Withdrawals come from accounts with different tax treatments. Sequencing which accounts we tap—and how Roth conversions, capital gains, and required distributions interact—can stretch the plan. Meanwhile, poor early returns can stress a rigid plan. Conservatism up front and adaptive spending are powerful antidotes.
Turning a plan into action
- Set a spending target in today’s dollars, with a cushion.
- Choose an SWR suitable for your horizon and risk tolerance.
- Compute the starting withdrawal and map monthly cash flows.
- Revisit annually—update inflation, portfolio value, and constraints.
- Add flexibility: define when to trim or boost withdrawals.
Limitations and good habits
- Backtests are not guarantees—use ranges, not single-point answers.
- Costs and taxes matter—net your plan for fees and taxes where possible.
- Hold enough cash or short-term bonds to smooth bad markets.
- Keep investing simple and diversified to reduce unforced errors.
Bottom line
A sustainable withdrawal plan balances today’s life with tomorrow’s needs. By anchoring on a careful SWR, accounting for inflation, and building in flexibility, we make a plan that can bend without breaking.