Retirement Withdrawal Calculator
How long will your retirement savings last? Model withdrawals with inflation adjustment and investment returns to see your year-by-year balance projection.
How Retirement Withdrawals Work
During retirement, you draw down your savings while the remaining balance continues to grow through investment returns. The key challenge is balancing withdrawals against growth so your money lasts as long as you live. The classic 4% rule suggests withdrawing 4% of your initial portfolio in year one, then adjusting for inflation each subsequent year. This approach has historically provided a 95% success rate over 30-year periods based on the Trinity Study. However, your actual results depend on market returns during your specific retirement years, particularly the first few years when sequence-of-returns risk is highest.
Inflation Impact on Retirement Income
Inflation is the silent threat to retirement planning. At 3% inflation, your purchasing power is halved in 24 years. A $4,000 monthly withdrawal today would need to be $7,200 in 20 years to buy the same goods and services. This calculator models inflation-adjusted withdrawals that increase each year to maintain your living standard. Without inflation adjustment, your real income decreases every year, potentially forcing painful spending cuts in your 80s and 90s. Investing a portion of your retirement portfolio in growth assets helps combat inflation by generating returns above the inflation rate.
Strategies to Make Retirement Savings Last
Consider a dynamic withdrawal strategy: withdraw less in down markets and more in good years. The guardrails approach sets upper and lower limits — increase spending when your portfolio grows above the upper guardrail and decrease when it drops below the lower guardrail. Delaying Social Security to age 70 increases your benefit by 24-32% compared to claiming at 66-67, providing a larger inflation-adjusted income floor. Consider a bond tent strategy: holding a higher bond allocation in the first 5 years of retirement to reduce sequence risk, then gradually shifting back to stocks. Keep 1-2 years of expenses in cash to avoid selling investments during market downturns.
Frequently Asked Questions
What is the 4% rule?
Withdraw 4% of your portfolio in year one, then adjust for inflation each year. Based on the Trinity Study, this has a 95%+ success rate over 30-year periods with a balanced portfolio.
How long will $1 million last in retirement?
At $4,000/month withdrawal with 6% returns and 3% inflation, $1 million lasts approximately 30+ years. Without investment returns, it lasts about 21 years.
Should I adjust withdrawals for inflation?
Yes. Without inflation adjustment, your purchasing power decreases every year. At 3% inflation, your money buys half as much in 24 years.
What is sequence-of-returns risk?
Poor market returns in your first few years of retirement can permanently damage your portfolio. Even if average returns are good, early losses combined with withdrawals deplete your savings faster.
How much should I withdraw monthly?
The 4% rule translates to roughly 0.33% of your portfolio per month. For $1 million, that is $3,333/month initially. Adjust based on your other income sources and life expectancy.
What return rate should I assume?
A balanced 60/40 portfolio has historically returned 6-8% annually. Conservative retirees might assume 5-6%. Higher stock allocations may return more but with greater volatility.