This safe withdrawal rate calculator works backward from your money to the most you can take out. Enter your portfolio, spending, guaranteed income, horizon, stock and bond mix, and the inflation rate you expect. It finds the highest starting percentage that lasts exactly that long, with steady returns and after a rough start.
The defaults describe $1,000,000, $60,000 of spending, and $20,000 a year of Social Security benefits, so the portfolio supplies a $40,000 retirement withdrawal, a 4.00% draw. With 60% in stocks earning 7%, bonds earning 4%, and 3% inflation over 30 years, smooth returns support 4.79% ($47,879 in year one). After two bad opening years the ceiling drops to 3.58% ($35,836). This plan works only if markets cooperate early.
Safe Withdrawal Rate Calculator
Find the highest starting draw your portfolio can sustain over a chosen horizon, first with steady returns and then with a fixed bad start, and compare it with your planned spending.
Results come from two fixed return paths: your expected real return every year, and the same return after a hypothetical two-year bear market (stocks down 20% after inflation each year, bonds flat). They are not probabilities and not a prediction; real markets can do worse. Taxes, fees, and required minimum distributions are not modeled. Educational only, not investment advice.
How the Retirement Withdrawal Calculator Finds Your Number
Most retirement calculators take a rate of return you expect and calculate how long your savings will last. Tools that let you see how long your retirement savings will last take the draw as given. This one fixes the horizon and solves for the draw, so the calculator helps with the decision that comes first: the initial withdrawal. The calculator uses four steps:
- Blend the returns. 60% of 7% plus 40% of 4% is a 5.8% nominal expected annual rate of return.
- Remove inflation. 1.058 divided by 1.03 leaves a 2.72% real return.
- Solve the steady path. Money comes out at the start of each year and rises with prices throughout retirement. The level that empties the account at year 30 is 4.79%.
- Solve the stressed path. Stocks lose 20% after inflation in years 1 and 2 while bonds earn nothing real, so a 60/40 investment portfolio loses 12% twice. Then the normal return resumes: 3.58%.
Both paths are fixed, with no random simulation. The stress case is hypothetical; markets have done worse. The model rebalances the portfolio each year and ignores taxes and fees.
No calculator will help if the inputs are wrong. Before you use the calculator to determine anything, count your total retirement savings, personal savings in taxable accounts, and every retirement fund you’ll draw on, but not home equity. Still adding to savings each year? Our coast FIRE calculator fits someone still saving for retirement better.
Where the Four Percent Rule Came From
The number traces to William Bengen, a California planner. His article “Determining Withdrawal Rates Using Historical Data” ran in the Journal of Financial Planning in October 1994. He split a portfolio between common stocks and intermediate-term Treasuries, started a hypothetical retiree in each year from 1926 on, and raised the dollar draw by inflation annually. What he found:
- 3% was “absolutely safe”: no starting year ran dry in under 50 years.
- 4% “should be safe”; in no past case did it exhaust a portfolio before 33 years.
- 4.25% could empty one in as little as 28 years.
- At 5%, people retiring in the late 1960s and early 1970s might have had only 20 years of funds.
He called five percent “risky” and six or more “gambling,” and recommended 50% to 75% in stocks.
In February 1998 three Trinity University finance professors, Philip Cooley, Carl Hubbard, and Daniel Walz, published “Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable” in the AAII Journal. They tested various withdrawal rates from 3% to 12% using the S&P 500, long-term high-grade corporate bonds, and 1926 to 1995 data, counting success as an ending balance above $0. Their Table 3, with draws raised by the Consumer Price Index, gives these success rates across 41 overlapping 30-year periods:
| Mix | 3% | 4% | 5% | 6% |
|---|---|---|---|---|
| 100% stocks | 100% | 95% | 85% | 68% |
| 75/25 | 100% | 98% | 83% | 68% |
| 50/50 | 100% | 95% | 76% | 51% |
| 25/75 | 100% | 71% | 27% | 20% |
| 100% bonds | 80% | 20% | 17% | 12% |
The Trinity authors wrote that “mid-course corrections likely will be required,” and following the 4% figure without them ignores that warning.
Why Average Returns Overstate the Withdrawal Rate
Bengen opened his paper with this trap. His quoted averages (stocks 10.3%, intermediate Treasuries 5.1%, inflation 3%) give a 50/50 mix a 4.56% real return. Enter them and the calculator uses them to allow 5.91% on the steady path, far over the 4% history supported. The stressed path gives 4.49%, closer, because it charges for a bad start.
Draws taken during a slump lock in losses: fewer shares remain for the recovery. Bengen saw it in the data: the 1973 to 1974 decline, his “Big Bang,” shortened portfolios begun 20 or more years earlier, and inflation, not 1930s deflation, did the worst damage. Investment performance in the first five years matters more than long-run investment returns.
Stocks, Bonds, and a Counterintuitive Result
More stocks raise the smooth answer and lower the stressed one (30 years, default returns):
| Share in stocks | Smooth | Bad start |
|---|---|---|
| 0% | 3.82% | 3.75% |
| 25% | 4.21% | 3.70% |
| 50% | 4.62% | 3.62% |
| 75% | 5.05% | 3.51% |
| 100% | 5.49% | 3.37% |
The spread is the price of volatility: all bonds barely feel the test, all stocks lose the most from a bad start. Morningstar’s The State of Retirement Income: 2025 reached a similar place by a different method: its best base-case figure came from portfolios holding 30% to 50% in equities. Your risk tolerance sets where you sit, and every investment strategy here trades possible income for certainty.
Match the Horizon to How Long Your Retirement Savings Must Last
Length plays the biggest role in determining how long a given draw holds up. Same money, same 60/40 mix:
| Years | Smooth | Bad start |
|---|---|---|
| 20 | 6.37% | 4.80% |
| 25 | 5.42% | 4.07% |
| 30 | 4.79% | 3.58% |
| 35 | 4.35% | 3.25% |
| 40 | 4.02% | 3.00% |
An early retirement requires 40 years or more, and a lower withdrawal rate is the cost of those extra years of retirement. Bengen suggested life expectancy plus 5 or 10 years; the Trinity paper noted a 50% chance of outliving the actuarial average. Use our life expectancy calculator to estimate how long your retirement horizon should be at your desired retirement age, and plan for the spouse likely to live longer.
The results also show a perpetual figure, 2.65% at the defaults: the draw that spends only real growth, keeping principal for heirs. It’s hidden when the real return is zero or below.
Social Security, Pensions, and the Share Your Portfolio Covers
Guaranteed income sources shrink the portfolio withdrawal your retirement portfolio must supply, so the tool subtracts them first. By default, $1,667 of monthly Social Security covers a third of a $60,000 real retirement budget.
- Social Security rises with the CPI each year, matching how this model grows spending. Our Social Security break-even calculator shows when waiting to claim pays.
- A pension without a cost-of-living raise loses purchasing power, so count part of it, or value it with the pension present value calculator.
- Taxes come out of the draw. A 401(k) or traditional individual retirement account pays out ordinary income, so gross up spending first.
Count only income for retirement that’s dependable. A retirement without a pension leans harder on the portfolio, and the early retirement years are when the stressed number matters most.
Is 4% Too High for 2026 Retirees?
Morningstar’s December 2025 report set its base case at 3.9% for 30 years, using forward-looking return assumptions and a 90% chance of money remaining. Earlier base cases: 3.3% in 2021, 3.8% in 2022, 4.0% in 2023, and 3.7% in 2024.
Inflation is the other lever. The Bureau of Labor Statistics reported the all-items CPI up 3.4% in the 12 months through August 2026, core up 2.4%. Expect a rate of inflation above 3%? Raise the input. The right rate depends on horizon, mix, returns, and inflation, plus whether you’ll trim spending after a bad year.
Turning a Rate Into a Withdrawal Plan
What makes the money last in retirement is a few habits:
- Use the stressed figure for your first year of retirement. Raising spending later is easier than cutting it after a crash.
- Take monthly withdrawals if that matches your bills; what you spend each year divided by 12 is close enough.
- Keep one to two years of spending in a savings account so you needn’t sell in a slump.
- Rerun it yearly with your current savings balance and the years left, and check it against your retirement goals.
Different withdrawal strategies, such as guardrails that trim spending after a loss, can support more than a fixed real draw and make your savings last when markets won’t cooperate. A fee-only financial advisor can set those rules and weigh them against your standard of living and the rest of your retirement plan.
Run the safe withdrawal rate calculator with your own numbers, then again with returns one point lower. If your draw sits under the stressed result both times, you have margin. Between the two, decide now what you’d cut if you ever risked having to run out of money.
Questions About Picking a Rate
Is 5% sustainable?
Over 20 years, usually. Over 30, Bengen called it risky, and the Trinity CPI-adjusted table shows 76% to 85% success for mixes at least half in stocks.
Can I use it as an income calculator to withdraw each year?
Yes. Multiply the stressed percentage by your balance for year one, then raise that withdrawal amount by inflation each year in retirement. Need your savings to last longer? Lengthen the horizon.
Last reviewed September 2026 against Bengen (1994), Cooley, Hubbard and Walz (1998), Morningstar’s 2025 report, and the BLS August 2026 CPI release. Deterministic scenarios, not probabilities. Educational only, not investment advice.