Find out how much annual and monthly income your retirement savings can generate, and how long your balance will last.
The 4% rule is a widely used retirement planning guideline suggesting that withdrawing 4% of your retirement portfolio in the first year, then adjusting that dollar amount for inflation every year after, gives a high probability the money will last at least 30 years. This calculator lets you test 4% or any withdrawal rate against your own expected investment return.
Annual withdrawal = Balance × (Withdrawal Rate ÷ 100). If the dollar amount you withdraw each year is less than or equal to what your portfolio earns in growth (Balance × Return Rate), your balance can theoretically last indefinitely. If withdrawals exceed growth, the calculator estimates the number of years until the balance reaches zero using the compound depletion formula:
t = ln( W / (W − B×r) ) / ln(1 + r)
Where W is the annual withdrawal, B is the starting balance, and r is the annual return rate.
With a $800,000 balance, a 5% expected return, and a 4% withdrawal rate, you'd withdraw $32,000 per year ($2,667/month). Since 4% is less than the 5% expected return, the portfolio is growing faster than it's being drawn down, so under these assumptions the balance does not run out.
This tool assumes a constant, average annual return every year and does not account for market volatility, sequence-of-returns risk, taxes, or inflation-adjusted withdrawals — all of which affect real-world outcomes. Use it as a starting-point estimate, not a guarantee, and consider speaking with a financial advisor for a full retirement income plan.
A guideline suggesting about 4% of your portfolio can be withdrawn in year one, adjusted for inflation after, with historically low risk of running out.
Total portfolio multiplied by your chosen withdrawal rate.
No — it's based on historical data; poor early returns or longer retirements could require a lower rate.