Retirement Withdrawal Calculator

The total amount you start retirement with, before any withdrawals.
Annual amount, or monthly income if you chose "Monthly income target" above. This is the year-one amount, before any inflation adjustment.
Enter as a percent: 5 means 5% per year. This is an average, not a promised return — real returns vary year to year.
Only used when the box above is checked. Each year's withdrawal rises by this percent so spending power stays level.
How far ahead to report the ending balance (1 to 60 years). The "how long it lasts" figure is simulated up to 100 years regardless.

Try it: $500,000, $20,000 a year, 5% return, 3% inflation — the money lasts about 37 years and leaves about $266,291 after 30 years.

Quick Answer

A retirement withdrawal is the money you take out of your retirement savings each year to live on after you stop working. The most widely used starting point is the 4% rule: withdraw 4% of your nest egg in the first year, then raise that dollar amount with inflation each year after. On a $500,000 nest egg, 4% is $20,000 a year, or about $1,667 a month. As a steady-average illustration — 5% annual return, 3% inflation — that $500,000 lasts about 37 years and still leaves about $266,291 after 30 years. The 4% rule is a historical guideline, not a guarantee: real returns vary, taxes and fees take a share, and a bad market early in retirement can shorten how long the money lasts. Use the calculator above with your own numbers before treating any rule as a plan. Good retirement planning means stress-testing the rule, not just trusting it. Judge the result over the long term, not just the first few years.

How to use this calculator

Enter your starting nest egg, then your withdrawal as either an annual amount or a monthly retirement income target — pick whichever you think in. Add the annual return you expect on average, choose whether withdrawals should rise with inflation each year (checked by default), and set your planning horizon, for example 30 years. Press Calculate and you get four things: how long the money lasts (simulated up to 100 years), your balance after your chosen horizon, the total you will have withdrawn over that horizon, and a year-by-year table for the first 10 years. You also get two comparisons: what the 4% rule would give you on your balance, and what happens if you withdrew 10% less. The “Try the 4% rule” button fills in 4% of your nest egg as the withdrawal so you can compare it with your own figure in one click. Your retirement age shapes the horizon: retiring earlier means the money must last longer, so set the horizon accordingly.

How the calculation works

Each year follows the same two steps, in this order:

  1. Growth: the starting balance for the year grows by the expected annual rate of return. On $500,000 at 5%, that is $25,000 of growth in year one.
  2. Withdrawal: that year’s withdrawal is taken. If inflation adjustment is on, each year’s withdrawal is the previous year’s withdrawal raised by the inflation rate, so spending power stays level.

Ending balance = starting balance + growth − withdrawal. That ending balance becomes next year’s starting balance, and the loop repeats until the money runs out or 100 years pass. If a year’s withdrawal is bigger than the balance plus growth, the money runs out during that year, and the calculator reports that year as the depletion year. Withdrawals are treated as taken at each year-end, after growth — a stated convention, not a hidden one. A monthly income target is converted to an annual withdrawal by multiplying by 12 before the same loop runs.

Worked example: $500,000 at the 4% rule

Start with $500,000, withdraw $20,000 a year (4%), expect a 5% return, and adjust withdrawals for 3% inflation. Here is what the loop does:

  • Year 1: $500,000 + $25,000 growth − $20,000 = $505,000. Your withdrawal is smaller than growth, so the balance rises.
  • Year 2: $505,000 + $25,250 growth − $20,600 (the $20,000 raised by 3% inflation) = $509,650.
  • Year 10: the balance is $529,469. Withdrawals have grown to $26,095 a year, but growth ($26,455) still just covers them.
  • Year 30: the balance is $266,291. You have withdrawn $951,508 over those 30 years — far more than the $500,000 you started with, because growth kept refilling the pot along the way.
  • Year 37: the money runs out. After year 30 the balance turns down, because inflation keeps raising the withdrawal while the shrinking balance produces less growth each year.

Now change one thing: withdraw 10% less, $18,000 a year instead of $20,000. The money then lasts 43 years instead of 37, and the 30-year balance is $455,759 instead of $266,291. A small cut early buys a large amount of extra time, because the money you do not withdraw keeps earning growth for decades. That is the single most useful insight this calculator gives you.

What happens if withdrawals exceed growth

This is the case that ends retirements early, and it is easy to spot. Take the same $500,000 at 5% return, but withdraw $50,000 a year (10%) with no inflation adjustment. Year-one growth is only $25,000, so the balance falls by $25,000 in the first year alone, to $475,000. Next year growth is smaller ($23,750) because the balance is smaller, while the withdrawal stays $50,000 — so the fall accelerates. The money runs out during year 15. The calculator flags this from year one, showing your withdrawal next to your first-year growth, so you can see the gap before you trust the plan. Three things fix it: withdraw less, save more before retiring, or accept a longer working life. Raising the return assumption on paper also “fixes” it, but only by assuming a future the market has not promised.

The 4% rule, explained honestly

The 4% rule comes from research by financial adviser William Bengen, published in 1994, and from the later Trinity Study by professors at Trinity University. Bengen tested a portfolio split roughly equally between stocks and bonds against U.S. market history from 1926 onward and found that withdrawing 4% in the first year, then adjusting that dollar amount for inflation each year, had survived even the worst historical stretches for at least 30 years. The rule is often reversed to size a nest egg: multiply the annual income you need by 25. Need $40,000 a year? 25 × $40,000 = $1,000,000.

Its limits matter as much as the rule itself:

  • It is a backward-looking result from U.S. history, not a promise about the next 30 years. Future returns, inflation, and interest rates may differ.
  • It assumes a 30-year retirement and a stock-and-bond mix. A 40- or 50-year retirement, or a very conservative portfolio, usually needs a lower starting rate — many planners use around 3% to 3.5% for longer retirements.
  • It assumes you keep withdrawing the inflation-adjusted amount even in bad market years. In practice, skipping the inflation raise or trimming spending after a bad year makes the money last much longer.
  • Recent research has moved the cautious figure slightly: Morningstar’s 2026 update put the safe starting rate at 3.9% for a 30-year retirement. The difference between 3.9% and 4% on $500,000 is only $500 a year — the point is flexibility, not the tenth of a percent.
  • It ignores taxes, fees, Social Security, pensions, and healthcare costs, all of which change the real answer. A $20,000 withdrawal from a traditional 401(k) or IRA is taxed as income, so it is not $20,000 to spend.

Treat the 4% rule as a starting checkpoint: if your planned withdrawal is well above 4%, your plan needs a second look; if it is near or below 4%, you have a reasonable starting point to stress-test, not a finished plan.

Sequence-of-returns risk: why the average can mislead

Like most retirement calculators, this one uses one steady average return every year, but real markets do not. If the market falls hard in your first few years of retirement, you sell investments at low prices to fund the same withdrawal, and those shares are gone for the recovery. The same average return with the bad years at the end instead produces a far better outcome. That ordering effect is called sequence-of-returns risk, and it is the biggest threat to an early retirement plan. Practical defenses, in plain terms: keep one to three years of spending in cash, savings accounts, or short-term bonds so you are not forced to sell stocks after a crash; be willing to trim spending by 10% to 20% in bad years; and consider starting slightly below 4% if your retirement could last 40 years or more. Run this calculator at a lower return than you hope for — that is your stress test, and it costs nothing. Most retirees hold that mix through mutual funds or ETFs, but the calculator only needs the average return, not the holdings.

Common mistakes

1. Treating the 4% rule as a guarantee. It survived history; it does not insure the future. A plan that only works at 4% with optimistic returns is fragile. Test it at a lower return and a higher inflation rate too.

2. Forgetting inflation. A flat $20,000 a year buys much less in 20 years. At 3% inflation, the same lifestyle costs about $36,000 after 20 years. That is why this calculator adjusts withdrawals for inflation by default — turn it off only if you deliberately plan to spend less in real terms over time.

3. Ignoring taxes. Withdrawals from traditional retirement accounts are taxed as income; Roth withdrawals generally are not. Work out the after-tax spending number you need, then gross it up for the withdrawal figure.

4. Counting Social Security twice — or not at all. Social Security benefits are inflation-adjusted income that reduces what the portfolio must cover. If you expect $1,500 a month from Social Security, your portfolio withdrawal only needs to cover spending above that, not your whole budget.

5. Using one optimistic return for the whole plan. A balanced retirement portfolio has historically averaged roughly 4% to 6% a year in real terms, but any single decade can be far worse. If the plan only works at 8%, it is not a plan yet.

6. Confusing “lasts 30 years” with “safe forever.” A plan that runs out in year 31 fails a retiree who lives to year 32. Pick a horizon longer than your expected retirement, and check the depletion year, not just the horizon balance.

Frequently asked questions

1. How long will my retirement money last?
It depends on four numbers: your starting nest egg, your annual withdrawal, your average return, and inflation. As an illustration, $500,000 withdrawing $20,000 a year at a steady 5% return and 3% inflation lasts about 37 years. Enter your own numbers above — a higher withdrawal or lower return shortens the answer fast.

2. What is the 4% rule for retirement withdrawals?
Withdraw 4% of your nest egg in the first year of retirement, then raise that dollar amount by inflation each year. On $1,000,000 that is $40,000 in year one, or about $3,333 a month. It is a guideline from historical U.S. market data, aimed at lasting at least 30 years — not a guarantee.

3. How much can I withdraw from $500,000 in retirement?
At the 4% rule, $20,000 a year ($1,667 a month) in year one, rising with inflation. At a steady 5% return and 3% inflation, that illustration lasts about 37 years. Withdrawing $30,000 a year (6%) from the same pot would run out much sooner — use the calculator to see the exact year for your return and inflation assumptions.

4. What happens if I withdraw more than my investments earn?
The balance falls, and the fall accelerates: a smaller balance earns less growth next year while the withdrawal stays the same (or rises with inflation). For example, $500,000 withdrawing $50,000 a year at 5% return runs out during year 15, even though the first-year shortfall looks modest at $25,000. The calculator flags this gap in year one.

5. Should I adjust my withdrawals for inflation?
If you want the same standard of living, yes — that is how the 4% rule is defined. A flat withdrawal buys less every year. But skipping the inflation raise in bad market years is one of the most effective ways to make money last longer, so many retirees treat the raise as optional, not automatic.

6. Does this calculator include taxes, Social Security, or fees?
No. Results are before tax and fees, and they do not include Social Security, pensions, medical expenses, or other income. To allow for those, reduce your withdrawal figure by the other income you expect (for example, subtract expected Social Security from your spending need first), and remember that traditional 401(k) and IRA withdrawals are taxed as income.

Disclaimer

This calculator is an educational illustration, not financial advice. It assumes one steady average return every year, year-end withdrawals after growth, and no taxes, fees, Social Security, pensions, healthcare costs, or market volatility. Real outcomes will differ, and sequence-of-returns risk means a bad market early in retirement can shorten how long your money lasts even if the long-run average matches your assumption. For an informed decision that affects your retirement, speak with a qualified financial professional.

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Sources

William Bengen’s 1994 research on safe withdrawal rates; the Trinity Study by professors at Trinity University; Morningstar’s retirement income research, including its 2026 update on safe starting withdrawal rates. No hyperlinks are included here by CalcMango house style; the named studies and research are the authorities for the 4% rule figures quoted above.