How to estimate retirement withdrawals
Test the first-year income and the sustainable amount.
1
Enter the portfolio
Use investable assets, excluding the home you live in.
2
Choose a withdrawal rate
Start with 3% to 4% and test a lower rate for a long retirement.
3
Add return and inflation
Use a real return assumption and keep it conservative.
What does this tool do?
The withdrawal rate sets the first-year income, while the return and inflation assumptions estimate how long the portfolio lasts. Sequence risk can change the outcome.
The Formula
Monthly income = Portfolio × Withdrawal rate ÷ 12; sustainable annuity uses the real returnFrequently Asked Questions
Is the 4% rule guaranteed?
No. It is a historical planning heuristic, not a promise. Lower expected returns, high fees or a long retirement may call for a lower rate.
Should the portfolio be all equities?
A diversified mix usually reduces volatility. The right allocation depends on time horizon and tolerance for loss.