4% Rule Withdrawal Calculator

The 4% rule says you can withdraw 4% of your portfolio in the first year of retirement, then raise that dollar amount by inflation every year, with a good chance the money lasts 30 years. This calculator applies the rule to your balance, shows each year's withdrawal and balance at a steady return, and tells you whether the savings last as long as you need.

How to use this tool

1. Enter your portfolio at retirement and the starting withdrawal rate (4% by default).
2. Enter the inflation rate your withdrawals should keep up with.
3. Enter a long-run portfolio return after fees.
4. Choose how many years retirement should last.
5. Optionally enter a spending goal to see the portfolio the rule calls for.

Formula

Year 1 withdrawal = portfolio × 4%

Year t withdrawal = year 1 × (1 + inflation)^(t − 1)

Portfolio needed = yearly spending ÷ 4% = 25 × spending

Each year the withdrawal comes out first and the remaining balance grows at the expected return. If the return only matches inflation, a 4% withdrawal lasts exactly 25 years (1 ÷ 0.04); every point of real return beyond that stretches the money further.

Example

From $1,000,000, the first withdrawal is $40,000 ($3,333.33 a month). With 3% inflation and a 6% return, the year-30 withdrawal has grown to $94,263 and the portfolio still holds about $1,056,600 — about $435,300 in today's dollars — so the money lasts all 30 years. If returns only matched inflation, it would run short in year 26.