The 4% rule comes from William Bengen's 1994 research and the Trinity Study. It found that retirees who withdrew 4% of their starting portfolio in year one, then adjusted for inflation each year, historically did not run out of money over 30-year retirements using a diversified stock and bond portfolio. It is a starting point, not a guarantee.

Is the 4% rule still valid in 2026?

Many financial planners now recommend 3 to 3.5% for retirements lasting 35 to 40 years, or for portfolios in lower-return environments. The original study used historical US stock and bond returns which may not repeat. This calculator lets you test any withdrawal rate so you can see what works for your specific assumptions.

How does Social Security affect how long my portfolio lasts?

Social Security income directly reduces the amount you need to withdraw from the portfolio each year. This can dramatically extend portfolio life. Enter your expected annual Social Security benefit to see the impact. You can get your benefit estimate at ssa.gov. Model both optimistic and conservative scenarios to understand the range of possible outcomes before committing.

What return rate should I use for retirement?

A balanced 50/50 stock and bond portfolio has historically returned approximately 5 to 6% before inflation. For conservative planning, use 4 to 5%. Using a higher rate like 8% will make the portfolio appear to last longer than it may realistically do. Verify current figures with the IRS or relevant authority before making financial decisions, as rates change annually.

What happens if my portfolio runs out?

The calculator shows the depletion year so you can plan ahead. Options if the timeline looks short: reduce planned spending, delay retirement by a few years, add part-time income in early retirement, adjust your asset allocation to higher-return investments, or plan to downsize housing and use equity.

Can I use this for an IRA or 401(k)?

Yes. Enter your total retirement account balance and planned annual withdrawals. Note that Required Minimum Distributions from traditional IRAs and 401(k)s start at age 73 under current IRS rules. If RMDs force higher withdrawals than you planned, your effective withdrawal rate increases.

Retirement Withdrawal Calculator

Enter your portfolio balance, planned annual withdrawal, expected return, and inflation rate to see a year-by-year depletion chart. Include Social Security or pension income to reduce the portfolio draw. A multi-rate comparison table shows what happens if you spend 1% more or less per year. Everything runs in your browser with nothing stored or transmitted.

How this tool works

The retirement withdrawal calculator models portfolio longevity under different withdrawal strategies. The classic 4% Rule withdraws 4% of the starting portfolio in year one and adjusts the dollar amount for inflation each subsequent year; research shows a 30-year survival probability above 95% for a balanced portfolio at this rate. The tool also runs a static depletion formula: Years Until Empty = -log(1 - (Portfolio x Rate / Annual Withdrawal)) / log(1 + Rate), where Rate is the expected real (net-of-inflation) annual return. A Monte Carlo simulation varies annual returns using a configurable distribution (equity mean 7%, standard deviation 15%; bond mean 2%, standard deviation 5%) to show failure probability at different withdrawal rates over 20, 25, and 30-year horizons. Required Minimum Distribution (RMD) amounts for traditional IRA and 401(k) accounts starting at age 73 are calculated using current IRS Uniform Lifetime Table factors. Key assumption: the 4% Rule is calibrated to a 30-year retirement horizon. Retiring at 60 with a 40-year horizon may require a 3.3-3.5% initial withdrawal rate to maintain comparable survival probability. Edge case: sequence-of-returns risk is the dominant threat to early retirement portfolios. A 30% market decline in years 1-3 depletes a portfolio at a roughly double the rate of the same decline in years 20-22, because early withdrawals sell at depressed prices. The Monte Carlo output emphasizes the worst-decile outcome for this reason.

Worked example

Portfolio: $1,000,000. Annual withdrawal: $40,000 (4% rate). Return: 5%. Inflation: 3%. Year 1: portfolio earns $50,000 and pays out $40,000, ending at $1,010,000. Withdrawals grow with inflation each year. At 4% with 5% return and 3% inflation the portfolio in this scenario lasts well past 30 years. Adding $24,000 in Social Security drops the effective draw to $16,000 (1.6%), and the portfolio effectively never depletes within the 60-year window.

Official sources

Frequently asked questions

What is the 4% rule?
The 4% rule comes from William Bengen's 1994 research and the Trinity Study. It found that retirees who withdrew 4% of their starting portfolio in year one, then adjusted for inflation each year, historically did not run out of money over 30-year retirements using a diversified stock and bond portfolio. It is a starting point, not a guarantee.
Is the 4% rule still valid in 2026?
Many financial planners now recommend 3 to 3.5% for retirements lasting 35 to 40 years, or for portfolios in lower-return environments. The original study used historical US stock and bond returns which may not repeat. This calculator lets you test any withdrawal rate so you can see what works for your specific assumptions.
How does Social Security affect how long my portfolio lasts?
Social Security income directly reduces the amount you need to withdraw from the portfolio each year. This can dramatically extend portfolio life. Enter your expected annual Social Security benefit to see the impact. You can get your benefit estimate at ssa.gov. Model both optimistic and conservative scenarios to understand the range of possible outcomes before committing.
What return rate should I use for retirement?
A balanced 50/50 stock and bond portfolio has historically returned approximately 5 to 6% before inflation. For conservative planning, use 4 to 5%. Using a higher rate like 8% will make the portfolio appear to last longer than it may realistically do. Verify current figures with the IRS or relevant authority before making financial decisions, as rates change annually.
What happens if my portfolio runs out?
The calculator shows the depletion year so you can plan ahead. Options if the timeline looks short: reduce planned spending, delay retirement by a few years, add part-time income in early retirement, adjust your asset allocation to higher-return investments, or plan to downsize housing and use equity.
Can I use this for an IRA or 401(k)?
Yes. Enter your total retirement account balance and planned annual withdrawals. Note that Required Minimum Distributions from traditional IRAs and 401(k)s start at age 73 under current IRS rules. If RMDs force higher withdrawals than you planned, your effective withdrawal rate increases.