Investment Withdrawal Calculator
An investment withdrawal calculator shows how many years your portfolio will last when you stop adding money and start taking it out. Enter your current balance, your monthly withdrawal amount, and an assumed annual return on the remaining invested balance.
The calculator above projects your balance year by year so you can see when — and whether — your portfolio runs out. This is an essential planning tool for retirement income and for stress-testing whether your savings can support your planned lifestyle.
How it's calculated
The calculator applies your expected annual return to the portfolio balance each month, then subtracts your monthly withdrawal. If the return outpaces withdrawals, the portfolio grows. If withdrawals outpace growth, the balance declines toward zero. The key variable is the gap between your withdrawal rate and your portfolio's return rate.
The 4% rule is the most widely cited guideline for sustainable withdrawals. Financial planner William Bengen introduced it in a 1994 Journal of Financial Planning paper: withdrawing 4% of your initial portfolio value in year one — then adjusting that dollar amount for inflation each year — has historically sustained a 30-year retirement across most historical market scenarios when invested in a balanced stock-bond portfolio. The non-obvious limitation: the 4% rule was calibrated for a 30-year retirement and a roughly 50/50 stock-bond mix. For a 40-year retirement (retiring at 55 with a 95-year life expectancy) or a heavily equity-weighted portfolio, some researchers — including Wade Pfau at the American College of Financial Services — argue a 3.3% rate is safer. Conversely, flexible spending (reducing withdrawals in bad market years) can make a higher rate viable. The savings goal calculator can help you determine how much you need to accumulate before retirement.
A worked example
Suppose you retire with $1,000,000 invested at an average 6% annual return and withdraw $5,000 per month ($60,000 per year, a 6% initial withdrawal rate). The 4% rule would suggest $40,000 per year is the sustainable baseline on a $1M portfolio.
At $5,000 per month your withdrawal exceeds the 4% guideline, so the calculator shows the portfolio depleting in roughly 24 years — potentially short for a 30+ year retirement. Reducing withdrawals to $3,500 per month ($42,000 per year, just over 4%) extends the portfolio well beyond 30 years under the same return assumption.
Common mistakes to avoid
- Assuming a fixed return each year in retirement. Real portfolios fluctuate, and sequence-of-returns risk means a market crash in your first few retirement years is far more damaging than the same crash later — even if the average return ends up identical.
- Ignoring inflation adjustments. A fixed $4,000 monthly withdrawal buys less purchasing power each year. The 4% rule adjusts the dollar amount upward for inflation annually; a flat-nominal withdrawal is more conservative in real terms over time.
- Using the 4% rule for a 40+ year retirement. It was designed for 30 years. A 55-year-old retiree with a 40-year horizon should model a lower rate (3–3.5%) or plan for more flexible spending.
- Forgetting taxes on withdrawals. Traditional IRA and 401(k) withdrawals are taxed as ordinary income. Factor your tax bracket into how much to actually withdraw each month.
- Not modeling Social Security or other income. A partial income stream (Social Security, pension, annuity) can dramatically extend portfolio longevity by reducing how much you need to withdraw from investments.
Frequently asked questions
What is the 4% rule for retirement withdrawals?
The 4% rule states that withdrawing 4% of your initial portfolio value in year one — then increasing that dollar amount by inflation annually — has historically sustained a 30-year retirement in most market scenarios. It was introduced by financial planner William Bengen in 1994 using U.S. historical return data going back to 1926.
How long will $1 million last in retirement?
It depends on your withdrawal rate and portfolio return. At a 4% withdrawal rate ($40,000 per year, or about $3,333 per month) with a 6% average return, a $1 million portfolio can last 30+ years. At a 6% withdrawal rate ($60,000 per year), the same portfolio may deplete in roughly 24 years. Use the calculator above to model your specific numbers.
Is the 4% rule still valid?
It remains a useful starting point, but many researchers suggest adjusting it based on your circumstances. For a 30-year retirement with a balanced portfolio, 4% has held up historically. For a 40-year retirement or a period of low expected returns, 3–3.5% is more conservative. Flexible spending — reducing withdrawals in bad market years — can make a higher rate viable.
What withdrawal rate is safe for early retirement?
For a 40-year retirement horizon (retiring in your 50s), researchers such as Wade Pfau suggest a safe withdrawal rate closer to 3.3–3.5%. A 30-year horizon supports the traditional 4%. The longer the horizon, the more compound inflation and sequence-of-returns risk matter, both of which push the safe rate down.
Does Social Security affect how much I can withdraw from my portfolio?
Yes, significantly. Social Security income reduces how much you need to draw from your portfolio each month, which extends its longevity. For example, $2,000 per month in Social Security means you need $2,000 less per month from your investments — the equivalent of having an additional $600,000 in a portfolio earning 4%. Always model Social Security separately when planning retirement withdrawals.