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Test the 4% rule and other withdrawal strategies. Model how long your retirement portfolio will last under different rates, inflation assumptions, and market return scenarios.
Portfolio is sustainable!
Your withdrawal rate is safe for 30 years of retirement.
Everything you need to know
A safe withdrawal rate (SWR) is the percentage of your retirement portfolio you can withdraw each year with high confidence that your money won't run out during your lifetime. It's the cornerstone of retirement planning — the link between your portfolio size and what you can actually spend.
The most famous safe withdrawal rate is 4% — popularized by the Trinity Study (1998) and William Bengen's 1994 research, which analyzed historical US market returns across all 30-year retirement windows. They found that a 4% annual withdrawal (inflation-adjusted) from a 50–75% stock portfolio survived virtually every historical period, including the Great Depression and the 1970s stagflation era.
In 1994, financial planner William Bengen analyzed rolling 30-year periods in US market history, asking: what withdrawal rate has never depleted a portfolio over 30 years?
His answer: 4.15%. Later rounded to 4% for simplicity.
The 1998 Trinity Study (Cooley, Hubbard, Walz) expanded the analysis and found:
The key caveat: these studies assumed 30-year retirements. Early retirees planning 40–50 year retirements need to be more conservative.
| Retirement Duration | Suggested SWR |
|---|---|
| 20 years | 5.0–5.5% |
| 25 years | 4.5% |
| 30 years | 4.0% |
| 35 years | 3.5% |
| 40 years | 3.25% |
| 50 years | 3.0–3.25% |
More recent research (Wade Pfau, Michael Kitces) suggests even lower rates — around 3.3% — are appropriate for today's lower bond yields and potentially lower future equity returns.
The calculator shows whether your withdrawal rate is sustainable (portfolio grows or holds steady) or depleting (portfolio reaches zero), and charts your balance year by year.
If your withdrawal increases with inflation each year, the effective withdrawal in year n is:
Withdrawal(n) = Initial Withdrawal × (1 + inflation)^n
And your portfolio balance:
Balance(n) = Balance(n-1) × (1 + return) − Withdrawal(n)
The portfolio depletes when Balance(n) ≤ 0.
Higher stock allocation = higher long-term returns but more volatility. Research shows:
The order of returns matters enormously. A major market crash in the first 5 years of retirement is far more damaging than the same crash in year 20, because:
Mitigation strategies:
Rigid inflation-adjusted withdrawals are the hardest case. In practice, retirees often:
Studies show that even small spending flexibility — cutting 10% in down markets — dramatically improves portfolio survival.
Social Security, pensions, annuities, and rental income reduce the required portfolio withdrawal rate. If Social Security covers $20,000/year and you need $60,000, you only need your portfolio to cover $40,000 — effectively lowering your withdrawal rate.
A research-backed system that adjusts withdrawals based on portfolio performance:
This "guardrails" approach improves portfolio survival dramatically while only modestly impacting spending in bad times.
This eliminates the risk of running out of money for necessities while preserving lifestyle flexibility.
Is the 4% rule safe for a 40-year retirement? Research suggests 4% is slightly aggressive for 40–50 year retirements. Use 3.25–3.5% for early retirees. Some FIRE advocates accept a higher failure rate (5–10%) and plan to be flexible.
What if inflation is higher than expected? High inflation erodes purchasing power and forces larger nominal withdrawals. Holding TIPS (Treasury Inflation-Protected Securities), I-bonds, and maintaining income-producing assets (rental real estate, dividend stocks) provides inflation hedges.
Should I use a financial advisor for withdrawal planning? The SWR is a starting point, not a complete retirement plan. A fee-only financial planner can model Social Security timing, tax-efficient withdrawal ordering (Roth vs. traditional accounts), healthcare costs, and estate planning — all of which significantly affect real-world outcomes.
What's the best way to stress-test my withdrawal rate? Run Monte Carlo simulations across thousands of random return sequences (available in financial planning tools). A 90–95% success rate is generally considered safe; 100% success typically means you're withdrawing too conservatively and leaving money on the table.
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