Safe Withdrawal Rate Calculator

A safe withdrawal rate is the percentage of a starting portfolio you could withdraw each year (adjusted for inflation) without depleting it over a target time horizon — traditionally 30 years. The best-known figure, the “4% rule,” comes from research William Bengen published in the early 1990s using historical U.S. market data.

That 4% figure is a rule of thumb calibrated on one specific stretch of market history, not a law of finance. It's a reasonable starting point for a conversation, not a number to treat as guaranteed. Testing it against real historical data — rather than accepting it on faith — is exactly what this calculator is for.

The biggest reason a fixed withdrawal rate can succeed for one retiree and fail for another with an identical portfolio is sequence-of-returns risk: the order in which returns happen matters as much as the average return itself. Withdrawing a fixed amount during an early downturn locks in losses that a later downturn, after years of growth, wouldn't.

That's why a withdrawal rate that worked perfectly starting from one historical month can fail starting just a few years later — even though the long-run average return across both periods might look similar. Testing every rolling historical window, not one average-return projection, is the only way to see that.

Instead of assuming a constant annual return, this calculator replays actual monthly total returns — including reinvested dividends — starting from any historical month the underlying data supports. That means a withdrawal plan gets tested against real bear markets (2000, 2008, 2022) and real recoveries, not a smoothed average that never actually happened in that shape.

Allocation matters here too: a bond-heavier mix tends to reduce volatility during withdrawals but also caps long-run growth potential, while an equity-heavy mix does the opposite. Neither is objectively “better” — they're different tradeoffs worth testing side by side.

Enter a starting portfolio value and a monthly withdrawal amount in dollars (rather than a percentage) — thinking in real dollars makes the tradeoffs more concrete. Add an inflation adjustment, then build an allocation from scratch or start from the 60/40 preset loaded above.

Once results appear, look past the median outcome: check the “historical survival rate” (the share of tested starting months where the portfolio never hit zero) and specifically the worst historical starting month, not just the typical one.

There's nothing special about 4% beyond it being the figure most often discussed — the calculator doesn't treat it as a default to defend. A useful exercise is testing a range: run $3,333/month (4% of $1M) as shown above, then try $2,917/month (3.5%) and $2,500/month (3%), keeping everything else the same, and watch how the historical survival rate changes with each step.

That comparison is often more informative than any single number, because it shows how sensitive a specific plan is to the withdrawal rate — a plan where survival barely changes between 3.5% and 4% behaves very differently from one where it drops sharply.

This calculator doesn't model taxes, fees, Social Security, pensions, or unplanned expenses like a major medical bill or home repair — all of which would change how much a real portfolio needs to cover. Layering those in yourself, on top of what this tool shows, is part of turning a backtest into an actual plan.

It also can't model behavior: a real investor who panic-sells during a downturn locks in losses this simulation doesn't assume, since the tool assumes the allocation stays exactly as set for the full test period. A stress test of a fixed withdrawal plan against market history is one input worth having — not a substitute for a full financial plan or a conversation with a professional.