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Retirement Withdrawal Sustainability Calculator

Find out whether your portfolio can sustain your planned withdrawals through retirement, accounting for investment returns and inflation-adjusted spending.

Inputs

$
$

Annual withdrawal in today's dollars

%

Nominal annual portfolio return

%

Annual inflation rate applied to withdrawals

$

Annual income from Social Security, pension, etc. (reduces withdrawals needed)

Results update as you type, and the address bar keeps your numbers so the link you share reopens this exact calculation.

Years until portfolio depleted

31 yr

Sustainable: portfolio positive after 30 years

Detailed results
Initial withdrawal rate4%
Balance at year 10Nominal balance at end of year 10$1,343,916
Balance at year 20Nominal balance at end of year 20$1,806,111
Balance at year 30Nominal balance at end of year 30$2,427,262

What this result means

Years until portfolio depleted: 31 yr.

At a 4.0% initial withdrawal rate — $40,000 net per year from a $1,000,000 portfolio — your portfolio is projected to remain positive through all 30 years of the simulation. A 7.0% nominal return outpaces both your 3.0% inflation-adjusted spending growth and the annual draw, allowing the balance to hold or grow. Keep in mind this projection assumes a constant return each year; real markets vary, and sequence-of-returns risk means a sharp early downturn can produce very different outcomes than averages suggest.

Year-by-Year Withdrawal Sustainability Schedule

Shows each year's inflation-adjusted withdrawal, investment return earned, nominal portfolio balance, real (inflation-adjusted) balance, and the withdrawal rate relative to the starting-year balance.

Year-by-Year Withdrawal Sustainability Schedule. 30 rows, first 12 shown.
YearWithdrawalInvestment ReturnYear-End BalanceReal Balance (inflation-adj.)Withdrawal Rate
1$40,000$70,000$1,030,000$1,000,0004%
2$41,200$72,100$1,060,900$1,000,0004%
3$42,436$74,263$1,092,727$1,000,0004%
4$43,709$76,491$1,125,509$1,000,0004%
5$45,020$78,786$1,159,274$1,000,0004%
6$46,371$81,149$1,194,052$1,000,0004%
7$47,762$83,584$1,229,874$1,000,0004%
8$49,195$86,091$1,266,770$1,000,0004%
9$50,671$88,674$1,304,773$1,000,0004%
10$52,191$91,334$1,343,916$1,000,0004%
11$53,757$94,074$1,384,234$1,000,0004%
12$55,369$96,896$1,425,761$1,000,0004%

How this is calculated

effective_withdrawal_year_1 = max(0, annual_withdrawal − additional_income)
withdrawal_year_n = effective_withdrawal_year_1 × (1 + inflation_rate)^(n−1)
balance_year_n = balance_year_(n−1) × (1 + annual_return) − withdrawal_year_n
real_balance_year_n = balance_year_n / (1 + inflation_rate)^n
initial_withdrawal_rate = effective_withdrawal_year_1 / portfolio_balance
depletion_year = first year where balance_year_n ≤ 0

Will your retirement portfolio last?

The most important question in retirement planning is deceptively simple: will the money run out before you do? This calculator simulates your portfolio year by year, applying your expected investment return and adjusting withdrawals upward for inflation, so you can see exactly when — if ever — the balance hits zero.

The 4% rule in context

A landmark 1994 study by William Bengen, later elaborated in the "Trinity study," found that retirees who withdrew 4% of their initial portfolio in the first year, then adjusted that dollar amount for inflation each year, historically avoided depleting their portfolios over 30-year periods in most historical market sequences. This became known as the 4% rule and remains a widely cited planning benchmark.

That figure is a historical observation, not a guarantee. It was derived from U.S. market returns and inflation data going back decades, during a period that included exceptional equity performance. Lower future return expectations, longer retirements (35–40 years instead of 30), or higher inflation can push the sustainable rate meaningfully below 4%. This calculator lets you test any combination of assumptions rather than anchoring to a single rule of thumb.

Sequence of returns risk

Average returns do not tell the full story. A portfolio that earns 7% per year on average can be devastated if the losses come early. Imagine losing 30% in year one — your withdrawals now represent a far larger share of a smaller portfolio, leaving fewer assets to participate in the recovery. This phenomenon is called sequence of returns risk, and it is why two retirees with identical average returns but different return sequences can have radically different outcomes.

This calculator uses a constant annual return, which is the right tool for understanding the structural sustainability of a withdrawal rate under a given return assumption. To stress-test for sequence risk, re-run with lower returns (e.g., 3–4%) to simulate a rough first decade, and separately with higher returns for comparison.

Sustainable versus nominal returns

Your portfolio's nominal return is the raw figure — say, 7%. But inflation quietly erodes the purchasing power of every dollar left in the account. This calculator tracks both the nominal balance (what the account statement shows) and the real balance (inflation-adjusted, in today's dollars). The real balance is arguably what matters: a $1 million nominal balance in 20 years is worth far less if prices have doubled in the meantime.

Strategies for improving sustainability

If the simulation shows early depletion, several levers can extend portfolio life. Reducing withdrawals — even modestly — has a compounding effect. Adding guaranteed income sources (Social Security, pensions, annuities) reduces the portfolio draw directly. Dynamic withdrawal strategies — spending less in down markets and more in strong ones — can improve outcomes versus a rigid inflation-adjusted rule. A "floor and upside" approach pairs guaranteed income to cover essential expenses with growth assets for discretionary spending, removing sequence risk from the equation for the essentials.

Assumptions

  • Portfolio return is constant each year at the entered nominal rate; real market returns vary and sequence of returns risk is not captured by a constant-return model.
  • Withdrawals grow at the entered inflation rate each year beginning in year two, regardless of actual inflation.
  • Effective withdrawal = max(0, annual_withdrawal − additional_income); additional income is assumed to be constant in nominal terms and does not itself inflate.
  • The portfolio cannot go negative; once depleted the simulation stops and remaining milestone years show zero balance.
  • No taxes are modelled on withdrawals or investment gains.
  • No one-time large expenses, healthcare cost spikes, or legacy/bequest goals are modelled.
  • Required minimum distributions are not enforced; the simulation uses only the user-entered withdrawal amount.
  • Investment returns are assumed to be realized fully each year with no management fees, fund expenses, or trading costs reducing them.
  • The 'real balance' is calculated by dividing the nominal balance by cumulative inflation through that year; it represents purchasing power in today's dollars.

Frequently asked questions

›What is the 4% rule, and should I use it?

The 4% rule is a guideline from historical research suggesting that withdrawing 4% of your initial portfolio in year one, then adjusting for inflation each year, has historically sustained a 30-year retirement in most U.S. market scenarios. It is a useful starting benchmark, not a guarantee. Longer retirements, lower expected returns, or higher inflation may call for a lower initial rate (3–3.5%), while strong guaranteed income or shorter horizons might allow a higher rate. Use this calculator to test the specific numbers for your situation.

›What is sequence of returns risk, and why does it matter so much?

Sequence of returns risk is the danger that poor market returns early in retirement — when your portfolio is largest — cause irreversible damage to your long-term sustainability. Unlike during accumulation, when poor early returns are offset by continued contributions, in retirement you are withdrawing regardless of market performance. A 30% loss in year two forces you to sell more shares to meet the same dollar withdrawal, leaving fewer shares to recover when markets rebound. This calculator models a constant return; to probe sequence risk, re-run the simulation with a significantly lower return (e.g., 2–4%) and observe how quickly the balance depletes.

›How does the 'additional income' field affect the calculation?

Social Security benefits, pension income, rental income, and other recurring revenue reduce how much you need to withdraw from the investment portfolio each year. The calculator subtracts additional income from your stated annual withdrawal to get the net portfolio draw. If your Social Security alone covers essential expenses, even a modest portfolio at a high nominal withdrawal rate may be sustainable — because the effective portfolio withdrawal could be near zero.

›What is a floor strategy, and how does it improve sustainability?

A floor strategy separates retirement income into two buckets. The 'floor' is guaranteed income — Social Security, pensions, and possibly annuities — sized to cover essential, non-negotiable expenses like housing, food, and healthcare. The 'upside' portfolio is invested for growth and used for discretionary spending. Because essential expenses are covered regardless of market performance, sequence of returns risk effectively disappears from the floor. The upside portfolio can be invested more aggressively and can endure bad early years without forcing cuts to necessities.

›What are dynamic withdrawal strategies?

Dynamic withdrawal strategies adjust annual spending based on portfolio performance rather than rigidly applying an inflation-adjusted dollar amount. Common approaches include the 'guardrails' method (cut spending if the portfolio drops below a threshold, increase if it rises above one), the 'percentage of portfolio' method (withdraw a fixed 4% of the current balance each year — spending varies but depletion is impossible), and the 'RMD method' (withdraw only what IRS required minimum distribution tables dictate). All of these trade spending predictability for improved longevity, and research generally shows they outperform rigid rules in depleted-portfolio scenarios.

›Why does inflation matter so much in this calculator?

Inflation compounds relentlessly. At 3% annual inflation, your purchasing power halves in about 24 years. If your withdrawals do not keep pace, you are effectively taking a real pay cut every year in retirement. This calculator inflates the withdrawal amount by your entered rate each year, which is the standard assumption behind studies like the Trinity study. If you plan to hold spending flat in nominal terms (accepting a real pay cut), you could reduce the inflation rate input to 0 — this would show a more optimistic depletion picture, but it may not reflect your actual cost of living.

›What does 'real balance' mean in the schedule?

The real balance is your portfolio's nominal balance divided by the cumulative inflation factor for that year. It converts the future account balance back into today's purchasing power. For example, if your nominal balance is $800,000 in year 15 but cumulative inflation has been 3% per year, the real balance is roughly $514,000 — the equivalent amount in today's dollars. Tracking the real balance alongside nominal balance makes it easier to assess whether your remaining wealth is actually meaningful.

›Does this calculator account for taxes on withdrawals?

No. The calculator operates on gross portfolio values and gross withdrawals. If your portfolio is primarily in pre-tax accounts (Traditional 401(k), Traditional IRA), your actual after-tax withdrawals will be lower than the gross amount entered, and you should gross up your withdrawal figure to account for the taxes you will owe. For Roth accounts, withdrawals are tax-free and no adjustment is needed. A tax-aware retirement income plan should layer the tax treatment of each account over these structural sustainability projections.

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