Retirement Withdrawal Calculator

Most retirees spend monthly, not annually, which is why this calculator takes a monthly dollar figure rather than an annual percentage. Add an inflation adjustment and it increases the withdrawal once per simulated year — mirroring how real spending tends to grow with the cost of living rather than staying flat.

Withdrawing a fixed, inflation-adjusted amount during a market decline means selling more shares for the same dollar amount, which permanently shrinks the base that has to recover afterward. That's why an identical withdrawal plan can succeed starting from one year and fail starting just a few years earlier or later — the market's path after the first few years of retirement matters disproportionately.

As a hypothetical illustration: two retirees each start with $1,200,000 and withdraw $5,000 a month. One retires into a multi-year rally; the other retires right before a downturn. Even if both markets fully recover to the same level a decade later, the second retiree has withdrawn a larger share of a smaller balance along the way — a gap the first retiree never has to close. That's sequence-of-returns risk in concrete terms.

It's worth naming these as two separate risks: running out of money because the market underperformed (what this tool tests) versus simply living longer than planned (a separate, personal risk this tool doesn't estimate). Testing a longer horizon than your expected life expectancy is a common, practical way to build in some margin for the second risk.

“Ran out after X years” specifically means the balance hit zero before the test period ended for that particular historical starting month. A failure in one specific window doesn't mean the whole plan is unworkable — it means that exact combination of timing, spending, and allocation didn't hold up in that stretch of history. Testing several allocations or withdrawal amounts shows how sensitive a plan actually is.

This calculator tests one fixed withdrawal plan at a time — the same inflation-adjusted amount every month, regardless of what the market is doing. Many retirees instead use some form of flexible spending, cutting back a bit during a downturn and spending more freely during strong years, which this tool doesn't model directly.

A practical way to approximate that flexibility here: test a somewhat lower fixed withdrawal amount than you'd ideally like, and treat the gap as a buffer you could choose to spend in good years and skip in bad ones — closer in spirit to how a real, adaptive plan behaves than a single rigid number.

Enter your starting nest egg, your essential monthly withdrawal, and an inflation assumption, then build an allocation — a mix that shifts toward more income-oriented holdings as retirement approaches is a common pattern worth testing, though not the only reasonable one.