Retirement Withdrawal Calculator

How the retirement withdrawal calculator works

Saving builds the pot; this tool tests whether the pot can actually pay you. It walks through retirement year by year. The balance earns your chosen return, then you take a withdrawal that grows with inflation so the income keeps the same purchasing power. The calculator tracks the running balance and flags the year the money would run out if it does.

The shaded chart plots the portfolio balance across your horizon. A line that drifts upward or stays flat means your withdrawals are comfortably covered, while a line sloping toward zero is a warning that the income is too high for the returns you have assumed.

A worked example

Start with one million dollars, draw $40,000 in the first year, and assume a 6 percent return with 3 percent inflation over 30 years. That opening draw is a 4 percent rate. Because returns stay ahead of withdrawals in the early years, the balance holds up and still has a healthy cushion at the end of three decades. Lift the first draw to $60,000, though, and the same portfolio empties well before the horizon closes.

Things to keep in mind

This model uses a single steady return, but real markets deliver good and bad years in an unpredictable order, and a run of poor returns early in retirement is especially damaging. Stay flexible, and trim spending in down years rather than drawing blindly. For a deeper look at sustainable spending, see Investor.gov. To size the pot you start from, use our retirement corpus calculator.

Frequently asked questions