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Safe Withdrawal Rate Calculator

What a withdrawal rate produces in cash, whether the portfolio survives the period, and the rate that would exactly exhaust it. Above the real return, capital is being consumed.

Also called: 4 percent rule, withdrawal rate calculator.

$
%
%
Annual withdrawal
$48,000.00

$48,000.00 a year, or $4,000.00 a month, at 4%. On a 5% real return the portfolio is never consumed, because you withdraw no more than it earns.

Monthly
$4,000.00
Years it lasts
100
Balance at the end of the period
$32,520,301.88
Rate that lasts exactly the period
6.51%
What happens to the capital
is never consumed, because you withdraw no more than it earns.
How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Withdrawing exactly the real return preserves the capital forever. Withdrawing more consumes it, and the sustainable rate shown here is the one that runs the balance to zero at the end of the stated period, which is always higher than the real return because it permits spending the capital too. The four percent rule sits between the two for a thirty-year horizon on historic US returns, which is precisely where it came from.

the rate that exactly exhausts the portfolio over n years at a real return r
r
Real return (decimal)
n
Years (years)

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

the four percent rule on a 1.2 million portfolio

Portfolio
$1,200,000.00
Withdrawal rate
4%
Years it must last
30
Real return
5%

Annual withdrawal$48,000.00

4% of 1,200,000 is 48,000, or 4,000 a month. The rate that would exactly exhaust it over 30 years at a 5% real return is 0.05 / (1 - 1.05^-30) = 6.51%, so 4% leaves a wide margin.

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withdrawing exactly the return preserves the capital

Portfolio
$1,200,000.00
Withdrawal rate
5%
Years it must last
30
Real return
5%

Annual withdrawal$60,000.00

boundary: the definitional perpetuity case, where the withdrawal equals the real return and the capital is never touched

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a heavy withdrawal exhausts it

Portfolio
$1,200,000.00
Withdrawal rate
12%
Years it must last
30
Real return
5%

Annual withdrawal$144,000.00

degenerate case: 144,000 a year against a 5% real return runs the balance to zero in the twelfth year, worked separately year by year

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Method and limits

What it assumes

  • Returns are real, after inflation, so withdrawals hold their purchasing power.
  • A constant return every year, which is the assumption that fails hardest.

What it deliberately does not model

  • Sequence of returns risk dominates in reality. Two portfolios with the same average return and different orderings can end decades apart.
  • Fees and tax come out before anything here.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

Can I withdraw forever?
Only at or below the real return. Anything above it eats capital, and the sustainable rate on this page tells you how long that takes for the horizon you set.