Safe Withdrawal Rate (SWR) Calculator
Determine your potential retirement income based on your nest egg size and chosen Safe Withdrawal Rate (SWR). Explore how different SWRs affect your income and historical success rates.
Safe Withdrawal Rate (SWR)
The Safe Withdrawal Rate (SWR) is the estimated percentage of your initial portfolio that you can withdraw annually (adjusted for inflation) with a high probability of not running out of money during retirement.
This concept is anchored in the seminal Trinity Study, which analyzed historical market data. The study famously found that a 4% withdrawal rate on a portfolio of 50% stocks and 50% bonds survived every 30-year period in market history up to that point.
How to Use This Calculator
Enter Your Nest Egg
Input the total value of your retirement portfolio. You can sync this with your profile for convenience.
Select a Withdrawal Rate
Use the slider to choose the percentage of your portfolio you plan to withdraw each year. The historical success rate for your chosen percentage will be displayed.
See Your Potential Income
The calculator will show you the potential annual and monthly income you could receive from your portfolio based on your selected SWR.
Beyond the 4% Rule
Understanding historical success rates and risks helps you build a more robust retirement plan.
The Trinity Study
Stocks (50-75%) are historically required to keep up with inflation and support a 4% withdrawal rate over 30+ years.
Sequence Risk
A crash early in retirement is dangerous. If your portfolio drops 50% in Year 1, your 4% withdrawal becomes effectively 8% of the remaining balance.
Be Flexible
The easiest way to increase safety is flexibility. If the market crashes, tighten your belt. Dynamic spending rules often beat rigid ones.
Market Valuation
When stocks are very expensive (High CAPE ratio), future returns tend to be lower, suggesting a more conservative withdrawal rate might be prudent.
Take Your Plan to the Next Level
This calculator is just one piece of the puzzle. Use our full Financial Independence Simulator to unite your income, investments, and expenses into a single, interactive roadmap.
What's the Next Step?
Your SWR directly influences your retirement target.
Frequently Asked Questions
The 4% Rule is a well-known guideline for retirement withdrawals, originating from a study called the Trinity Study. It suggests that if you withdraw 4% of your initial portfolio value each year, adjusted for inflation, your portfolio has a very high probability of lasting for at least 30 years.
Whether the 4% rule is still 'safe' is a topic of much debate. Factors like longer lifespans, lower expected future market returns, and sequence of returns risk have led some financial planners to recommend a more conservative rate, such as 3.5% or lower. This calculator helps you explore the historical success rates of different SWRs.
Sequence of Returns Risk is the danger that the timing of your investment returns is unfavorable. Experiencing poor market returns in the first few years of retirement can have a disproportionately negative impact on your portfolio's longevity, because you are withdrawing money from a shrinking portfolio, which can be difficult to recover from. This is why a 'safe' withdrawal rate is not a guarantee.