Retirement Withdrawal Calculator: Test the 4% Rule
Use our free retirement withdrawal calculator to determine how much you can safely withdraw from your 401k, IRA, or other retirement accounts. Our Monte Carlo simulation tests thousands of market scenarios to calculate the probability of your money lasting through retirement. Factor in Social Security, pension income, and taxes for a complete picture.
Enter your portfolio details and click "Calculate" to see withdrawal strategy projections.
About Retirement Withdrawal Strategies
The 4% Rule
The traditional 4% rule suggests withdrawing 4% of your initial portfolio in the first year, then adjusting that amount for inflation each year. Research suggests this provides a high probability of portfolio survival for a 30-year retirement.
Percentage vs. Fixed Withdrawals
Percentage-based withdrawals automatically adjust to market conditions, reducing withdrawals in down markets. Fixed withdrawals provide more stable income but may deplete your portfolio faster in market downturns.
Sequence of Returns Risk
Poor investment returns in the early years of retirement can significantly impact portfolio longevity. This calculator uses Monte Carlo simulation to account for this risk by modeling many possible market scenarios.
Disclaimer: This calculator provides projections based on the information you provide and uses Monte Carlo simulation to model potential outcomes. Actual results will vary based on market performance, inflation, and other factors. This tool is for educational purposes only and does not constitute financial advice. Consult with a financial professional for personalized guidance.
How to Use This Retirement Withdrawal Calculator
This calculator uses Monte Carlo simulation to test your retirement withdrawal strategy against thousands of possible market scenarios. Unlike simple calculators that assume fixed returns, our tool accounts for market volatility to give you a realistic success probability.
Understanding Withdrawal Rates
The 4% Rule Explained
The 4% rule suggests withdrawing 4% of your portfolio in year one ($40,000 from $1 million), then adjusting for inflation. Historical data shows a 95% success rate over 30 years.
Dynamic Withdrawal Strategies
Consider reducing withdrawals by 10-25% during market downturns and increasing them during bull markets. This flexibility can significantly improve your success rate.
IRA Withdrawal Taxes
Traditional IRA and 401k withdrawals are taxed as ordinary income. In 2025, federal tax brackets range from 10% to 37%. Factor in state taxes for your complete tax picture.
Required Minimum Distributions
Starting at age 73, you must take RMDs from traditional retirement accounts. Use our RMD Calculator to determine your required withdrawal amount.
Withdrawal Rate Guidelines by Portfolio Size
| Portfolio Size | 4% Withdrawal | 3.5% (Conservative) | 4.5% (Aggressive) |
|---|---|---|---|
| $500,000 | $20,000/year | $17,500/year | $22,500/year |
| $750,000 | $30,000/year | $26,250/year | $33,750/year |
| $1,000,000 | $40,000/year | $35,000/year | $45,000/year |
| $1,500,000 | $60,000/year | $52,500/year | $67,500/year |
| $2,000,000 | $80,000/year | $70,000/year | $90,000/year |
Frequently Asked Questions
What is a safe retirement withdrawal rate?
Most financial advisors recommend a withdrawal rate between 3-4% for a 30-year retirement. The exact rate depends on your asset allocation, other income sources, and flexibility to reduce spending during market downturns.
How do I calculate IRA withdrawal taxes?
Traditional IRA withdrawals are taxed as ordinary income. Add your IRA withdrawal to your other income (Social Security, pension, etc.) to determine your tax bracket. Our calculator includes a tax rate input to estimate after-tax income.
Should I include Social Security in my withdrawal calculations?
Yes! Social Security reduces the amount you need to withdraw from savings. If you receive $2,000/month from Social Security and need $5,000/month total, you only need to withdraw $3,000/month from your portfolio.
What's the difference between percentage and fixed withdrawals?
Percentage withdrawals (like the 4% rule) adjust with your portfolio value, providing more in good years and less in bad years. Fixed withdrawals provide consistent income but may deplete your portfolio faster during downturns.
Related Calculators
- Retirement Calculator - Calculate how much you need to save
- RMD Calculator - Calculate required minimum distributions
- Compound Interest Calculator - See how your investments grow
- Social Security Optimizer - Maximize your benefits
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Disclaimer: This calculator provides estimates based on historical data and Monte Carlo simulation. Actual results will vary based on market conditions, taxes, and other factors. This tool is for educational purposes only and does not constitute financial advice. Consult a qualified financial advisor for personalized retirement planning.