Retirement Withdrawal Calculator

Use this calculator to estimate how long retirement savings may last when you take annual withdrawals.

What this calculator does

The retirement withdrawal calculator models year-by-year withdrawals from a retirement balance. It accounts for investment return and inflation-adjusted withdrawals.

It uses:

• retirement savings balance
• annual withdrawal amount
• expected annual return
• inflation rate

Retirement Withdrawal Formula

Balance = (Balance - Withdrawal) × (1 + Return)

Where:

• Balance = retirement savings remaining
• Withdrawal = annual amount taken out
• Return = expected annual portfolio return
• Inflation = yearly increase in withdrawal amount

Example calculation

If:

• Retirement balance = 1,000,000
• First withdrawal = 40,000
• Expected return = 5%
• Inflation = 2%

Then:

• Year one balance after withdrawal = 960,000
• Balance after return = 1,008,000
• Year two withdrawal = 40,800
• The model repeats until the balance reaches 0

The result estimates how many full years the savings may last.

What is retirement withdrawal?

Retirement withdrawal is the process of taking money from savings or investments to fund living expenses. The withdrawal amount, return, and inflation rate determine how long the portfolio may survive.

Why retirement withdrawal matters

• helps avoid spending too much too early
• shows the impact of inflation on withdrawals
• connects portfolio value to lifestyle spending
• supports retirement income planning

When to use this calculator

• testing a planned annual withdrawal
• comparing return assumptions
• checking whether savings can last 20 to 40 years
• planning inflation-adjusted retirement income

Common mistakes

• assuming the same withdrawal forever without inflation
• ignoring poor market returns early in retirement
• withdrawing from a portfolio with no cash buffer
• treating the result as guaranteed

Retirement withdrawal vs withdrawal rate

Retirement withdrawal is the amount taken from the portfolio. Withdrawal rate is that amount expressed as a percentage of the portfolio balance.

A 40,000 withdrawal from a 1,000,000 portfolio is a 4% withdrawal rate.

FAQs

What is retirement withdrawal?

Retirement withdrawal is money taken from retirement savings to cover living costs.

How do you calculate retirement withdrawal?

Subtract the withdrawal from the balance, apply investment return, then increase the next withdrawal by inflation.

What is a good retirement withdrawal amount?

A common starting point is 3% to 4% of the portfolio, adjusted for personal risk, age, and other income.

What is the difference between withdrawal amount and withdrawal rate?

The amount is a currency value. The rate is that value divided by the portfolio balance.