Retirement withdrawal calculator

What withdrawal amount are you testing?

Enter the annual amount your investments need to provide, not necessarily your entire household budget. Once reliable income starts, it can cover part of your spending. If benefits begin later, use a full year-by-year plan rather than subtracting that income from every year here. Include investment fees in your net growth assumption and healthcare in spending. Figures are before income tax — talk to a tax professional about yours.

This tool starts withdrawals immediately at the entered age. It grows the invested balance at a constant real return, then subtracts the same real-dollar withdrawal at each year-end. Real return is (1 + nominal return) divided by (1 + inflation), minus 1. For 6% growth and 2.5% inflation, that is about 3.41%, not 3.5%. A partial final year's income is not separately modeled.

The full Finnlight plan instead includes contributions, income start dates, life events, and age-based spending assumptions. Review how the model works before comparing the two results. This calculator is a simplified scenario, not a simulation of market risk.

A $1.2 million example

At age 60 with $1.2 million, $60,000 annual withdrawals, and zero real growth, the balance covers 20 years, reaching zero at age 80. Lowering withdrawals to $40,000 extends it to 30 years, or age 90. Set investment growth equal to inflation above to reproduce this comparison. It isolates spending; it does not claim a household with $1.2 million is ready to retire.

With positive real growth the runway may extend, but a steady assumed return hides bad early years. Use the sequence-of-returns example to see how two paths with the same returns can finish with different balances. Lower growth, higher spending, and a longer horizon are useful stress tests, not predictions.

Is the 4% rule still safe?

There is no universal safe rate. The familiar 4% rule comes from historical withdrawal research using US portfolios and retirement horizons. It starts with 4% of the original balance, then adjusts that dollar withdrawal for inflation. It is not the same as taking 4% of the current portfolio every year. Historical results do not guarantee future outcomes or settle your personal retirement decision.

For $1 million, 4% starts at $40,000. At 2.5% inflation, an inflation-adjusted tenth-year payment is about $49,955. Keeping nominal withdrawals fixed at $40,000 reduces their purchasing power over time. Taking a percentage of the current balance makes income fluctuate. Decide which spending pattern matches your needs rather than treating these strategies as interchangeable.

Common questions

Sources: Bengen's 1994 withdrawal study · FINRA retirement portfolio guidance · Investor.gov risk and inflation