Retirement Withdrawal Calculator

The $500 gap in month one that sets your depletion year

Take the calculator’s default plan: a $600,000 balance, a $3,000 monthly withdrawal, a 5% annual return, and 3% inflation, with end-of-month timing. The monthly return factor is 0.05 ÷ 12 ≈ 0.004167, so month 1 credits 600,000 × 0.004167 ≈ $2,500 of growth, lifting the balance to $602,500. The $3,000 withdrawal then leaves $599,500 after month 1.

That $500 shortfall is the whole projection in miniature. Because the withdrawal exceeds the interest, the balance falls each month — and as it shrinks, the interest it earns falls too, so the decline accelerates. Running the same step month by month, the engine projects the money lasting about 35 years 11 months on these defaults. Switching to inflation-adjusted withdrawals steps the amount up by 3% each year (to $3,090 in year 2), which preserves purchasing power but drains the portfolio far sooner — about 20 years 10 months.

Four inputs move that gap and nothing else does: the starting balance, how much and how often you withdraw, the return the remaining balance earns, and inflation. When the return is the larger force, the balance holds or grows and the calculator reports “Indefinite on these assumptions” rather than a fabricated year; when the withdrawal is larger, you get a figure in years and months and an approximate depletion year. Read two outputs before any of the others — the current withdrawal rate, against the widely cited 4% reference point, and the break-even return, which is the return your plan would need to roughly preserve the balance rather than draw it down.

The projection runs month by month, so withdrawal increases, frequency, fees, taxes, and timing are applied across the whole schedule rather than annualised away. Three lines of arithmetic do all of it.

The rules those cards run under are worth stating in full, because the depletion year is conditional on every one of them, and they carry through to the schedule and the downloadable model unchanged:

• The drawdown runs month by month; the remaining balance earns a single constant periodic return (annual return ÷ periods per year, after fees), then the withdrawal is taken (or the reverse, depending on your timing setting).
• Current withdrawal rate = first-year withdrawals ÷ starting balance — the headline gauge for sustainability, with about 4% as a common reference point.
• Inflation-adjusted value discounts a future withdrawal to today’s purchasing power: real value = withdrawal ÷ (1 + inflation)ʸ.
• A plan whose return covers its withdrawals does not deplete in this constant-return model and is shown as “Indefinite on these assumptions” rather than a fabricated year.
• Optional tax is a simplified flat rate applied to withdrawals; the gross amount still leaves the portfolio.

How long $600,000 lasts at six withdrawal rates

Each cell is a full month-by-month drawdown of the same $600,000, with the first-year withdrawal set to that percentage and then raised 3% a year to hold its purchasing power — the assumption the 4% figure is built on.

The 4% row is the one to read carefully: it survives 35y 10m at a 5% return and only 25y 7m at 3% — the difference between comfortably funding a retirement and running out during it, from two percentage points of return. Note also what happens if the withdrawal is not raised with inflation: a fixed $2,000 a month on this balance is reported as Never depletes at a 5% return, because the payment never rises and a 5% return outruns it. That is a longer plan only in nominal terms — the same $2,000 buys less every year it continues.

This grid is what a safe withdrawal rate really is: the share of your starting balance you can take each year with a reasonable chance the money lasts your retirement. The best-known guideline is around 4%, drawn from historical US market data — a starting point rather than an answer. The sustainable rate is higher when real returns are strong, and lower when returns are weak, fees are high, or the income has to last a very long time.

The same 6% under a bad first decade

Every path below withdraws the identical $3,000 a month from the identical $600,000. Only the timing of the poor returns moves: three years at −15%, placed at the beginning, the middle, or the end, plus a first decade stuck at 2%.

Three bad years at the start cost 22.3 years of longevity. The identical three bad years at the end cost 3.6. Same returns, same withdrawals, same average — the damage is done by selling into a fall while the balance is still large enough to matter. A constant-return projection cannot show this, which is why the years-lasting figure above is better read as the top of a range than as the answer.

That is sequence-of-returns risk: poor returns early in retirement do lasting damage because you are selling assets to fund withdrawals while the balance is down, leaving less invested to recover. The same average return in a different order produces very different outcomes. The main projection holds the return constant, so what it cannot show is real market volatility or the order it arrives in — which is the argument for a cash cushion and for staying flexible with spending in a bad first decade.

Educational sequence-of-returns scenario model — not a Monte Carlo simulation, forecast, or guarantee. Each path keeps the same withdrawals, fees, tax, and inflation; only the timing of returns changes.

Fixed, inflation-linked, or a percentage of what is left

All three start at the same $36,000 in year one, from the same $600,000 at a 5% return. What they do afterwards is the actual retirement-income decision.

There is no winner here, only a choice of which thing to give up. Of the two that ever run out, the fixed payment lasts longest — the percentage rule never depletes at all, because it only ever takes a share of what is left. But the fixed payment’s year-20 income buys $19,932 in today’s terms, just over half of what $36,000 buys today. Raising it with inflation holds that purchasing power and empties the account in year 21. Taking a percentage of the balance can never run out by construction, but it hands the market control of your income: $29,610 in year 20, less in nominal terms than year one, and it would fall further in a bad decade.

As a rule: a fixed withdrawal holds the same nominal amount every year, so cash flow is steady while its purchasing power falls; an inflation-adjusted withdrawal raises the amount each year to keep its buying power, protecting your lifestyle but draining the portfolio faster; a percentage of the balance flexes with the portfolio and cannot empty it. Switch styles in the calculator above to put your own balance through all three.

The withdrawal to enter is your spending minus the pension

What this does not model matters as much as what it does. The engine draws down only the balance you type in; it knows nothing about Social Security, a State Pension, an annuity, or any other outside income. The withdrawal field is therefore not your target spending — it is the gap left once those payments are counted. Subtract the income you expect from target spending first, then enter only that remainder here.

Tax is a second adjustment in the same direction. The optional tax setting applies one simplified flat rate to withdrawals, and the gross amount still leaves the portfolio, which is what the schedule tracks. It does not model tax brackets, account-type rules, or country-specific treatment of pensions, withdrawals, dividends, or capital gains — treat it as a rough haircut, not a filing-accurate figure.

For a 401(k) or an IRA the balance-and-withdrawal model works as it stands: enter the account balance and the plan you intend to follow. It does not calculate required minimum distributions, contribution limits, or early-withdrawal penalties, and an RMD can force a withdrawal larger than the one you modelled, shortening the plan without your changing an input. Check those against your own account rules. The limitations behind every figure on this page, in full:

• Sequence-of-returns risk and real market volatility (the model uses a constant return)
• Country-specific tax rules on pensions, withdrawals, dividends, or capital gains
• Required minimum distributions, pension access ages, and contribution rules
• Guaranteed income products such as annuities
• Social Security, the State Pension, or other outside income streams

Why an SWP and a pension drawdown are one calculation

In some markets, especially India, a systematic withdrawal plan (SWP) describes taking a fixed amount from a mutual-fund investment on a schedule; in the UK the same act is called pension drawdown. The underlying math is identical — a balance, a periodic return on what is left, and a withdrawal taken on a schedule — so this page serves as an SWP calculator and as a global retirement-income and portfolio-drawdown calculator without changing a line of arithmetic.

Currency follows the same logic. Switch to GBP, EUR, CAD, AUD, or INR and every figure — the result panel, the year-by-year schedule, and the Excel and CSV export — redisplays in that currency while the withdrawal math is untouched. What differs between countries is never the drawdown itself; it is the tax and the access rules sitting around it.

Sources and methodology

This calculator runs a constant-return drawdown on the figures you enter. It does not compute required minimum distributions, pension access ages, or outside income, so the sources below cover both the model and the rules it deliberately leaves to you. The often-quoted 4 percent figure is a historical rule of thumb, not a guarantee. Links open in a new tab.

• Retirement plan and IRA required minimum distributions FAQs - the RMD rules that can force a withdrawal larger than the one you model here, which this calculator does not computeInternal Revenue Service (IRS) · verified 2026-09-01
• Retirement benefits - the outside income stream this calculator excludes, and which the page tells you to subtract from target spending before entering a withdrawalSocial Security Administration (SSA) · verified 2026-09-01
• Before You Claim - the regulator tool showing how much monthly benefit changes with claiming age, the figure to net off before setting a withdrawal amount hereConsumer Financial Protection Bureau (CFPB) · verified 2026-09-01
• Compound Interest Calculator - the compounding model published by the US securities regulator, the same periodic-return arithmetic applied to the balance that remains after each withdrawalU.S. Securities and Exchange Commission (Investor.gov) · verified 2026-09-01
• Consumer Price Index - the measured inflation series to sanity-check the inflation rate behind inflation-adjusted withdrawals and the real value of each paymentU.S. Bureau of Labor Statistics (BLS) · verified 2026-09-01
• Stocks - the regulator statement that returns are not guaranteed and prices can fall, which is why a constant-return drawdown cannot show sequence-of-returns riskU.S. Securities and Exchange Commission (Investor.gov) · verified 2026-09-01

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Read the guide

For how a withdrawal projection is actually built, and why the "years your money lasts" figure shifts so much when you nudge one input, see How to Estimate Retirement Withdrawals Without Overtrusting One Number.