Safe Withdrawal Rate Calculator
Sustainable yearly withdrawal from a portfolio
🔒 Local only · Method · · Disclaimer · Safe Withdrawal Rate Calculator
Safe Withdrawal Rate Calculator is built for sustainable yearly withdrawal from a portfolio — fast, free, and private. You supply Portfolio Value ($) and Withdrawal Rate (%) to Safe Withdrawal Rate; the answer follows at once. Safe Withdrawal Rate ties each output to its formula. Use Safe Withdrawal Rate for a reliable number, fast. No sign-up is needed for Safe Withdrawal Rate. The math runs on your device. Safe Withdrawal Rate sits in the Finance section next to free online safe withdrawal rate calculator and safe withdrawal rate calculator retirement 4 percent rule portfolio. Safe Withdrawal Rate shows formula, assumptions and result together. Safe Withdrawal Rate answers the next Finance question you meet.
What withdrawal rate is safe?
The safe withdrawal rate is the share of a portfolio you can take each year without running it down over a long retirement. It depends on the balance, the annual withdrawal and the return you expect, and the page reports the rate and how the balance evolves so the trade-off is visible instead of guessed at.
That is $5,000 a month before tax, with the rate intended to last a long retirement rather than a fixed term.
How the withdrawal is calculated
Annual withdrawal = Portfolio × Withdrawal rate, and the monthly figure is that amount ÷ 12.
A $1,000,000 portfolio at 4% gives 1,000,000 × 0.04 = $40,000 a year — about $3,333 a month.
| Portfolio | 3.5% | 4% | 4.5% |
|---|---|---|---|
| $500,000 | $17,500 | $20,000 | $22,500 |
| $750,000 | $26,250 | $30,000 | $33,750 |
| $1,000,000 | $35,000 | $40,000 | $45,000 |
The 4% guideline assumes a long retirement and a balanced portfolio; the sequence of returns matters as much as the rate. Related: retirement calculator and retirement guide.
The formula
Annual withdrawal = portfolio value × withdrawal rate
Monthly = annual ÷ 12
1,500,000 × 0.04 = $60,000; 60,000 ÷ 12 = $5,000 a month.
Worked examples
$500,000 at 4% → $20,000 a year, $1,667 a month
$1,000,000 at 4% → $40,000 a year, $3,333 a month
$1,500,000 at 3.5% → $52,500 a year
$1,500,000 at 4% → $60,000 a year
$2,000,000 at 3% → $60,000 a year
Where 4% comes from and what it assumes
The figure traces back to historical-return studies that tested how much could be withdrawn, adjusted annually for inflation, without exhausting a portfolio over a 30-year retirement. It is a planning rule with specific assumptions baked in: a diversified portfolio, a 30-year horizon, and a withdrawal that rises with inflation every year. Change any of those and the safe rate moves — a 40-year retirement usually supports less, and a shorter one more.
The risks the single number hides
- Sequence of returns. A bad first decade hurts far more than the same losses later, because withdrawals sell assets at low prices.
- Inflation. A fixed $60,000 buys less each year; the 4% rule assumes the withdrawal rises with prices.
- Fees. A 1% annual fee is a quarter of a 4% withdrawal, and it compounds against the portfolio.
- Taxes. The figure is gross. What arrives in the account depends on the wrapper and the jurisdiction.
- Flexibility. Guardrails — trimming withdrawals after a bad year and restoring them after a good one — extend a portfolio further than a rigid percentage.
Treat 4% as a starting band, test it against a bad early decade, and keep a cash buffer so a market drop does not force a sale at the bottom.
The first-year number is a starting point, not a salary. A 4% withdrawal on $1.5 million gives $60,000, and the rule assumes that amount rises with inflation each year, so year ten is roughly $73,000 at 2% inflation. A bad first two years changes everything: withdrawing the same amount from a falling portfolio sells more shares at lower prices, permanently reducing what the recovery can rebuild. A cash buffer of one to two years of spending is the simplest defence.
Frequently Asked Questions
How much can I withdraw from $1.5 million?
$60,000 a year at 4%, which is $5,000 a month before tax.
Is the 4% rule still valid?
It remains a reasonable planning starting point, but lower expected returns and longer retirements argue for testing 3.5% or a flexible rule as well.
Does the withdrawal include inflation?
The 4% figure assumes the amount rises with inflation each year. This calculator shows the first-year number, not the later ones.
What is sequence-of-returns risk?
The danger of poor returns early in retirement while withdrawals are being taken, which permanently reduces the capital that later recovery can work on.
Are taxes included?
No. The result is gross income. Tax depends on the account type and where you live, so model it separately.
What is a safer rate for a long retirement?
Many planners use 3.5% or lower for a 40-year horizon, or keep 4% with a flexible spending rule and a cash buffer.
Loan APR Calculator and other Finance tools
Loan APR Calculator · Bond Coupon Payment Calculator · Mortgage Points Break-Even · Moving Abroad Cost Estimator · Simple Interest Calculator · Sales Tax Calculator · Finance Guides