Retirement Withdrawal Calculator
1Your Savings & Withdrawal
2Growth Assumptions
Breakdown
What Is a Retirement Withdrawal Calculator?
The single scariest question in retirement planning is “will my money outlive me, or will I outlive my money?” This calculator answers it with a year-by-year simulation. Enter your savings balance, the amount you plan to withdraw in the first year, an expected investment return, and an inflation rate, and it plays your retirement forward one year at a time until the balance either runs dry or proves it can keep going. The headline shows roughly how many years your nest egg lasts, with balances after 10, 20, and 30 years.
How It Works
Each simulated year, the calculator takes your withdrawal out at the start of the year, lets the remainder grow at your expected return, and then raises next year’s withdrawal by inflation so your spending power stays level:
For each year, where B is the balance, W is that year’s withdrawal, r is the return, and i is inflation:
Bnext = (B − W) × (1 + r) Wnext = W × (1 + i)This is the logic behind the famous 4% rule: withdraw 4% of your starting balance in year one, adjust for inflation thereafter, and a diversified portfolio has historically had a strong chance of lasting 30 years or more. The 3%, 4%, and 5% chips let you test those classic starting rates instantly. If the balance is still growing after a century of simulation, the calculator reports “30+ years — likely indefinitely”, meaning growth outpaces your spending.
Worked Example: $500,000 at 5% vs. 4%
Suppose you retire with $500,000, expect a 6% return, and assume 2.5% inflation. Withdrawing $25,000 in year one — a 5% starting rate — the money lasts about 33 years: roughly $508,703 remains after 10 years, $415,975 after 20, but only about $111,261 after 30 as inflation-boosted withdrawals overtake growth.
Drop the first-year withdrawal to $20,000 — the 4% rate — and the picture transforms. The balance actually climbs for decades, sitting near $663,358 after 30 years, and the money lasts about 52 years. A one-percentage-point change in the starting rate added roughly two decades of spending.
Sequence-of-Returns Risk
The simulation assumes the same return every single year, and that hides retirement’s sneakiest danger: sequence-of-returns risk. Two retirees can earn the same average return over 30 years, yet the one who hits a bear market in the first few years — while withdrawing — can run out of money, because selling investments at depressed prices permanently shrinks the base that later recoveries compound on. Practical defenses include keeping one to three years of spending in cash, trimming withdrawals after bad market years, and starting at a conservative rate. Treat this calculator’s answer as a smooth-world baseline, not a guarantee.
Common Mistakes to Avoid
The most common error is plugging in an optimistic all-stock return; most retirees hold blended portfolios, so use a modest, after-fee figure. Second, forgetting that withdrawals from pre-tax accounts are generally taxable — the amount you withdraw is not the amount you keep. Third, ignoring inflation entirely, which quietly overstates longevity by years. Finally, don’t treat one projection as a plan: rerun the numbers annually as balances and spending change. This tool provides educational estimates only, not financial or tax advice — consult a qualified financial planner or tax professional before acting.
Frequently Asked Questions
What is the 4% rule?
It’s a rule of thumb from historical U.S. market research: withdraw 4% of your portfolio in the first year of retirement, raise the dollar amount with inflation each year, and a balanced portfolio has historically had a high probability of lasting at least 30 years. It’s a starting point for planning, not a promise.
Why does a small change in withdrawal rate matter so much?
Withdrawals compound in reverse. A larger withdrawal shrinks the balance, which shrinks next year’s growth, which forces the withdrawal to consume an ever-bigger slice. In the example above, moving from 5% to 4% stretched the money from about 33 years to about 52.
Does the calculator account for taxes?
No. Withdrawals from pre-tax retirement accounts are generally taxed as income, and taxable-account sales can trigger capital gains tax. Model your gross withdrawal here, then talk to a tax professional about what you’ll actually keep.
What does “30+ years — likely indefinitely” mean?
It means that under your assumptions, investment growth exceeds your inflation-adjusted withdrawals, so the simulated balance never runs out. Real markets are volatile, so treat it as “very durable under smooth assumptions,” not as a guarantee of permanence.