Safe Withdrawal Rate Calculator
Calculate how much you can safely withdraw from retirement savings each year without running out of money.
The Safe Withdrawal Rate (SWR) is the percentage of your retirement savings you can withdraw each year with a high probability of not running out of money during your lifetime.
The 4% Rule: The most well-known guideline, based on the 1994 Trinity Study, states that withdrawing 4% of your initial portfolio balance (adjusted for inflation each year) has historically survived 30 years of retirement in about 95% of scenarios.
Annual withdrawal = Portfolio value × Withdrawal rate
What each variable means:
- Portfolio value — your total retirement savings at the start of retirement
- Withdrawal rate — the percentage you take out each year (typically 3–5%)
- Retirement duration — how many years you need the money to last
- Inflation rate — annual increase in cost of living, which erodes purchasing power
- Expected return — average annual investment return on remaining portfolio
Suggested withdrawal rates by retirement length:
| Retirement Length | Conservative | Moderate | Aggressive |
|---|---|---|---|
| 20 years | 4.5% | 5.0% | 5.5% |
| 25 years | 4.0% | 4.5% | 5.0% |
| 30 years | 3.5% | 4.0% | 4.5% |
| 35 years | 3.0% | 3.5% | 4.0% |
| 40 years | 2.8% | 3.2% | 3.7% |
When to use this calculator:
- Planning how much to save for retirement
- Deciding when you can afford to retire
- Determining annual retirement income from savings
- Evaluating whether your current savings are sufficient
Practical example: A retiree with $1,000,000 in savings using a 4% withdrawal rate would take out $40,000 in the first year. If inflation is 3%, the second year withdrawal becomes $41,200, and so on.
Tips:
- Lower withdrawal rates (3–3.5%) are safer for early retirees (retiring before 60).
- Consider reducing withdrawals during market downturns to preserve capital.
- Social Security, pensions, and other income sources reduce the amount needed from savings.
- Keep 1–2 years of expenses in cash or low-risk investments to avoid selling stocks during crashes.
- The 4% rule assumes a balanced portfolio (50–75% stocks, 25–50% bonds).