Safe Withdrawal Rate Calculator

Last reviewed: June 16, 2026

What is a safe withdrawal rate?

A safe withdrawal rate (SWR) is the percentage of your portfolio you can withdraw each year without running out of money over a defined planning horizon. It is a planning heuristic — a starting point for sizing a retirement portfolio — not a guarantee or a formula that optimizes for any particular outcome.

The three-way SWR identity defines the relationship between spending, portfolio, and rate:

At a 4% rate, these are exactly equivalent: a $50,000/yr spending need corresponds to a $1,250,000 portfolio; a $1,250,000 portfolio produces a $50,000/yr safe withdrawal; and $50,000 ÷ $1,250,000 = 4%. The three quantities are three ways of reading the same triangle. This calculator solves for any one of them.

Where the 4% rule comes from

The 4% rule emerged from two landmark papers: William Bengen's 1994 paper in the Journal of Financial Planning, which analyzed historical U.S. market data and found that a 4% inflation-adjusted withdrawal from a stock/bond portfolio had never been depleted over any historical 30-year period; and the 1998 “Trinity Study” by Cooley, Hubbard & Walz (published in the AAII Journal), which systematically tested multiple withdrawal rates and portfolio allocations against Ibbotson historical data from 1926 through 1995.

The original Trinity Study found that a 50/50 portfolio (S&P 500 plus long-term corporate bonds) drawing at 4% survived about 95% of all historical 30-year windows. Later recreations by Pfau and others, using longer data through 2009 and 2014, found near-100% success for the same parameters. The discrepancy reflects differing bond indices and data windows — not a calculation error. Both findings are real; neither is wrong.

The reference table in the calculator above reflects both sets of numbers honestly. The range for 4% — approximately 95% to 100% — is not a presentation choice to be resolved by picking a single number; it is the accurate finding, and naming it as such is more useful to a planner than a false precision.

What the depletion simulation shows — and what it misses

The portfolio path chart uses a constant real return throughout the horizon. The real return is derived from your inputs via the Fisher equation:

At 7% nominal and 3% inflation: (1.07 / 1.03) − 1 ≈ 3.88%. All outputs are in today's purchasing power — directly comparable to your current account balance. The withdrawal is deducted at the start of each year; the remainder compounds at the real rate for the remainder of the year. This matches the start-of-year convention used by Bengen and Pfau.

The constant-return simulation is useful for answering “given these averages, does the math work?” — but it understates the real risk you face. Actual returns are not smooth; they arrive in a sequence. And in a drawdown portfolio, the sequence matters dramatically.

Sequence-of-returns risk

Sequence-of-returns (SoR) risk is the risk that poor returns arrive early in the withdrawal period — before the portfolio has benefited from years of compounding — rather than late. A portfolio that takes heavy losses in years 2–5 of retirement will be permanently smaller than one that takes the same losses in years 15–20, even if the average annual return over the full period is identical.

The reason is mechanical: drawing a fixed real amount from a depressed portfolio means selling more shares at low prices. Those shares are gone and can't participate in recovery. The portfolio enters the recovery at a lower base, and a lower base compounds to a lower terminal value.

This is why the 4% rule's historical success rate is meaningful — it was computed across actual historical return sequences, not averages. The constant-return simulation in this calculator does not capture this risk. The sequence-of-returns illustration uses two hypothetical sequences with the same arithmetic average (+5%/yr) to show the effect directly.

How to use this calculator

Select what you want to solve for at the top — withdrawal amount, required portfolio, or implied rate. Enter your assumptions and a planning horizon. The dimmed field in each mode is the output; the others are inputs.

• How much can I withdraw? Enter your portfolio and withdrawal rate. The calculator outputs the annual withdrawal and runs the depletion simulation using that amount.
• How much portfolio do I need? Enter your annual spending and withdrawal rate. The calculator outputs the required portfolio and runs the depletion simulation using that portfolio and spending.
• What rate does this imply? Enter your annual spending and current portfolio. The calculator outputs the implied rate — useful for understanding whether your current savings support your spending plan.

The planning horizon controls how many years the depletion simulation runs, not how long the historical success rates were computed over (which is always 30 years for the reference table). Common choices: 30 years for a standard retirement; 40–50 years for early retirement; 60+ for very early retirement or a high-longevity assumption.

What this calculator assumes

• Constant real return. The depletion path uses a single real return derived from your nominal return and inflation inputs. Actual returns vary year to year; the simulation does not capture sequence-of-returns risk.
• Today's-dollars framing throughout. All outputs — portfolio, withdrawal, and balances — are in real (inflation-adjusted) purchasing power.
• Constant real withdrawal. The annual withdrawal amount is held fixed in real terms — equivalent to raising the nominal withdrawal with inflation each year. Variable or declining withdrawals are not modeled.
• No taxes. Returns and withdrawals are pre-tax. Tax treatment depends on account type (Roth IRA, traditional 401(k), taxable brokerage) and jurisdiction. A common approach is to use after-tax spending and after-tax returns as inputs, or to add a tax buffer to spending.
• 4% is a heuristic, not a law. The 4% default is the most widely cited starting point from U.S. historical data. It may not apply over longer horizons, in international markets, or under market conditions outside the historical record. Many planners use 3–3.5% for very early retirement or high-longevity scenarios to build in a larger margin of safety.

Frequently asked questions

Is 4% always safe?

Not in an absolute sense. The 4% rate had a historical success rate of ~95%–100% for a 50/50 U.S. portfolio over 30 years — but historical success is not a guarantee for future outcomes, and the rate was derived from a specific data set, asset allocation, and time period. It is a reasonable planning anchor, not a guarantee. Many practitioners use 3–3.5% for early retirement (longer horizons) or in environments where expected returns are lower than historical averages.

Does this account for Social Security or other income?

Not directly. One approach: subtract any guaranteed income (Social Security, pension, annuity) from your annual spending before entering it. The resulting lower spending figure implies a lower portfolio target. This is sometimes called the “net spending approach.”

What is the relationship between SWR and FIRE?

The FIRE (Financial Independence / Retire Early) community uses the SWR identity to define the FIRE number: the portfolio at which your savings alone can fund your spending indefinitely. At 4%, the FIRE number is 25× annual spending. Coast FIRE and Barista FIRE are both derived from the same withdrawal-rate math — the Safe Withdrawal Rate calculator is the destination those tools cross-link to when they reference the 4% default.

Why does the SoR illustration use hypothetical sequences rather than historical data?

Historical return sequences are owned by their sources and can become outdated. Hypothetical sequences with controlled, labeled parameters illustrate the sequence-of-returns mechanism precisely — identical average, opposite order, directly comparable outcomes — without the ambiguity of cherry-picking a historical window. The sequences are clearly labeled as hypothetical throughout.