Retirement Drawdown Calculator
Plan your sustainable withdrawal strategy. Estimate how much you can safely withdraw each year and see your portfolio projection.
Interactive Calculator
Your Retirement Details
Your Projection
Estimated first-year withdrawal based on the 4% rule. Future withdrawals adjust for inflation.
Simplified estimate of likelihood your portfolio lasts the full horizon.
Note: Based on deterministic projection. Real-world results vary. Consider Monte Carlo for robust analysis.
Portfolio Balance Over Time
Interpreting Your Results
Reading the Chart
The chart shows your projected portfolio balance. A downward slope indicates spending. If it hits zero before your horizon ends, your plan might be too aggressive.
Success Probability
This simplified estimate suggests the chance your funds will last. Aim for 85%+. Remember, this isn't a guarantee and doesn't use complex simulations (like Monte Carlo). Real market volatility matters.
Adjusting Inputs
Experiment! Small changes to returns, inflation, or withdrawal strategy can have big impacts. Test different scenarios (optimistic, realistic, pessimistic) to understand potential outcomes.
Why Plan Your Drawdown?
Common Worries
- ✗ Running out of money in retirement?
- ✗ Impact of inflation on spending power?
- ✗ How much can be withdrawn safely each year?
- ✗ Uncertainty about market fluctuations?
How This Calculator Helps
- ✔ Estimate a sustainable withdrawal amount.
- ✔ Visualize potential portfolio trajectory over time.
- ✔ Understand the impact of return and inflation assumptions.
- ✔ Gain confidence by exploring different scenarios.
Example Scenario
Meet Jane (Using Defaults)
Jane uses the calculator with the default inputs (Age 55, Retiring 65, $750k portfolio, 7% return, 3% inflation, 30yr horizon, $24k SS).
Jane's Key Results:
- • Initial Withdrawal: $30,000 / year
- • Success Probability: 99% (Simplified)
Potential Takeaways:
- • Plan seems reasonably robust based on defaults.
- • Could test lower returns (e.g., 5%) for sensitivity.
- • Consider impact of delaying Social Security if possible.
This is illustrative. Your own inputs will generate personalized results.
Frequently Asked Questions
What is a 'safe withdrawal rate'?
A safe withdrawal rate is the percentage of your retirement portfolio that you can withdraw annually with a high confidence that your money will last throughout your retirement. The traditional '4% rule' suggests withdrawing 4% of your initial portfolio value in the first year of retirement, then adjusting that amount for inflation each year thereafter. This calculator uses the 4% rule for the initial recommendation.
How does inflation impact my withdrawals?
Inflation erodes purchasing power over time. If you withdraw a fixed dollar amount without adjusting for inflation, your standard of living will likely decline. This calculator's 'Fixed' strategy accounts for inflation by increasing the annual withdrawal amount based on the rate you provide, aiming to maintain your purchasing power.
Can I adjust my withdrawal rate over time?
Yes, adjusting is often recommended. 'Dynamic' withdrawal strategies (like adjusting based on market performance) allow this flexibility. While this calculator's dynamic option isn't implemented yet, the concept allows withdrawing less in down markets and potentially more in up markets, which can improve portfolio longevity. Consulting a financial advisor can help tailor a dynamic strategy.
What if my portfolio underperforms?
If your investments consistently return less than expected, you may need to reduce withdrawals to avoid running out of money, especially early in retirement (sequence risk). Re-running calculations with lower return assumptions can show the potential impact. Using a more conservative withdrawal rate initially can build a buffer.
Do you account for taxes?
No, this calculator shows pre-tax projections. Your actual spendable income will be lower after taxes, depending on account types (taxable, tax-deferred, tax-free) and your overall tax situation. Tax planning is crucial for retirement income; consult a professional for tax-efficient withdrawal strategies.
Disclaimer
This calculator is for informational and illustrative purposes only and does not constitute financial, investment, or tax advice. The projections are based on the inputs provided and simplified assumptions; they do not guarantee future results.
Market conditions, inflation, returns, and personal circumstances can vary significantly. Sequence of returns risk (poor returns early in retirement) is not explicitly modeled here. The success probability is a simplified estimate, not based on rigorous Monte Carlo simulations.
Consult with qualified financial, tax, and legal professionals before making any financial decisions. Use of this tool signifies acceptance of these limitations. See our Terms and Privacy Policy.