Choosing a retirement withdrawal is a budgeting decision: how much can your savings contribute toward the life you want, and how much flexibility should you keep? This calculator compares a familiar starting-rate approach with your own rate and an amount designed for a selected time horizon. It shows annual and monthly amounts so you can connect the result to regular bills. Every result depends on adjustable assumptions. Educational, not financial advice; no withdrawal strategy guarantees that savings will last.

What the 4% rule is (and isn't)

The familiar starting-withdrawal rule takes a percentage of the initial retirement portfolio to set the first year's spending. In its traditional form, later dollar withdrawals rise with inflation instead of being recalculated as that same percentage of the current balance. The idea comes from historical retirement research. Historical market experience can inform a discussion, but it cannot promise a safe outcome for a future retirement or every mix of investments.

The calculator's starting rate is 4%, labeled as an adjustable assumption. The comparison uses 3%, 4%, 5% and your custom rate to show how spending choices change the modeled duration. A higher starting withdrawal gives you more money now but leaves less invested for later. A lower rate may create more room for uncertainty, though the model cannot measure your personal comfort with that tradeoff.

The sustainable total-spending amount answers a different question: what initial annual budget fits the selected period under the entered return, inflation and optional Social Security? It uses the real return, which compares investment growth with rising prices, and assumes withdrawals at the beginning of the year. The default target age of 95 is an adjustable planning assumption, not a recommendation about how long you should plan to live.

Fixed-dollar vs percentage withdrawals

An inflation-adjusted dollar approach aims to preserve purchasing power. After the first year, the spending amount rises with the assumed inflation rate. That can make budgeting easier, but a scheduled increase may require selling more investments after a market decline. This tool follows that approach when comparing how long each starting withdrawal lasts: it takes spending at the start of the year and applies a constant return at year end.

A percentage-of-current-balance strategy recalculates spending from the balance each year. Spending generally falls when the portfolio falls and rises when it grows. That can share more investment risk with your budget, but it may produce income swings that are hard to absorb. The custom-rate result here sets an initial dollar amount; it does not simulate recalculating the same percentage against a changing balance every year.

Before choosing a rate, separate essential bills from flexible purchases. Include the amount needed for taxes and account fees in your budget. Try less favorable return and inflation assumptions and consider how you would respond to a bad year. For a closer look at the depletion age and annual balances for a specific spending amount, use how long will my money last.

On this withdrawal-rate page, Social Security is additional income. It does not reduce the displayed portfolio withdrawals or extend their duration. The sustainable total-spending budget includes benefits only from the entered start age, with inflation applied after payments begin; future COLAs are not forecast. Use the Social Security COLA calculator for the published annual adjustment. If retirement is still ahead, the 403(b) balance projection helps explore the savings you might bring into this calculation.

Withdrawals, RMDs and IRMAA

A spending target and a required minimum distribution are different things. An RMD is a distribution required by tax rules for applicable accounts and circumstances. It can exceed the amount you want to spend, and taking it does not require spending every dollar. This calculator does not calculate RMDs, identify an account's tax treatment or decide which account should supply a withdrawal. Confirm the rules that apply to your accounts.

Traditional retirement distributions can increase taxable income and the modified adjusted gross income Medicare uses for income-related premiums. A larger distribution, even for a one-time expense, may therefore affect a later year's Medicare cost. Read the 2027 IRMAA brackets to understand the income lookback, filing categories and status of the published figures before treating the displayed withdrawal as spendable cash.

The comparison is a steady-return illustration, not a market simulation. It does not capture a sequence of early losses, future tax changes or a sudden health expense. Revisit the plan regularly with actual balances and spending, and consider a longer horizon if you want room beyond your selected target age. A projected sustainable amount is a discussion aid, not a spending instruction.

Frequently asked questions

Is the withdrawal result before or after taxes?

It is an amount drawn from savings, before any separately calculated taxes. The tool does not prepare a tax return or estimate withholding. Include the cash needed for taxes when deciding what withdrawal would cover your spending.

Why is the sustainable amount different from the starting-rate amount?

The rate-based amount depends on savings and the selected percentage. The sustainable amount also depends on the time horizon, return, inflation and beginning-of-year withdrawal timing. They answer different planning questions.

Can I assume the monthly result arrives each month?

The monthly figure is the annual amount divided into equal monthly portions for budgeting. Investments and withdrawals are modeled annually; the tool does not simulate monthly distributions or establish a payment schedule.

Does a higher assumed return make a withdrawal safe?

No. It increases the modeled growth, but the actual return may be lower or negative. Compare several assumptions and consider how much essential spending depends on the portfolio.

What does the comparison mean if money lasts beyond the chart?

It means savings were not depleted during the fifty-year simulation under those inputs. It does not establish an unlimited withdrawal or a guaranteed lifetime income.

Sources

See every figure, status and verification date

Last updated: · Prepared by the MedicareBrackets editorial team.

Educational, not financial advice. Estimates are not official. Confirm your own benefit, Medicare or tax determination with the responsible agency.