How this calculator works
This calculator projects retirement income and account balance over time using a withdrawal-rate approach: you pick a percentage of your starting balance to withdraw in year one, and the calculator either holds that dollar amount fixed or grows it with inflation every year after, simulating the balance year by year against an assumed investment return.
The best-known version of this approach is the "4% rule," popularized by financial planner William Bengen's research and the later Trinity study (Cooley, Hubbard and Walz, 1998), which looked at historical U.S. market returns to estimate a withdrawal rate that a retirement portfolio could sustain over roughly 30 years in most historical periods. It is a heuristic derived from past data, not a guarantee — it does not account for fees, taxes, unusual sequences of poor early returns, or a retirement that runs longer than the historical sample.
Toggle between a fixed dollar withdrawal and an inflation-adjusted one to see how each affects the balance trajectory, and watch the depletion year: if the withdrawal rate outpaces the assumed return, the balance can run out well before the end of the projection.
The formula
Year 1 withdrawal = Balance × withdrawal rateAdjusted mode: Year t withdrawal = Year 1 withdrawal × (1 + inflation rate)^(t − 1)Fixed mode: Year t withdrawal = Year 1 withdrawal for every yearBalance after year t = (Balance before withdrawal − withdrawal) × (1 + return rate)Withdrawals are taken first each year, then the remaining balance grows at the assumed annual return. If a scheduled withdrawal exceeds the remaining balance, only the remaining balance is withdrawn and the account is depleted.
Worked example: $1,000,000 at a 4% withdrawal rate
- Year 1 withdrawal = $1,000,000 × 4% = $40,000 ($3,333 a month).
- The remaining $960,000 grows at an assumed 7% return: $960,000 × 1.07 = $1,027,200 at the end of year 1.
- In inflation-adjusted mode, year 2's withdrawal rises to $40,000 × 1.03 ≈ $41,200, and continues compounding with inflation each year after.
- Projected forward 30 years under these assumptions, the balance is still growing rather than shrinking — but a higher withdrawal rate or a lower return can flip that outcome, as the depletion year in this calculator shows.
Frequently asked questions
Is the 4% rule guaranteed to work?
No. It is a historical estimate based on past U.S. market returns over rolling 30-year periods, not a promise about the future. Actual results depend on the sequence and size of real returns during your specific retirement, fees, taxes, and how long you actually need the money to last.
Should I adjust withdrawals for inflation every year?
Adjusting for inflation keeps your purchasing power roughly constant but increases the dollar withdrawal every year, which is the assumption behind the original 4% rule research. A fixed dollar withdrawal preserves more of the balance over time but means your spending power shrinks in real terms as prices rise.
What does the depletion year mean?
It is the first projected year in which the balance reaches zero under the withdrawal rate, return and inflation assumptions entered. If no depletion year is shown, the balance did not run out within the number of years projected under this simplified model.
Does this account for market volatility?
No. This calculator assumes a constant annual return every year, which real markets never actually deliver. A retirement that starts with a few years of poor returns can deplete faster than a constant-return model predicts, even if the average return over the full period looks the same — a pattern often called sequence-of-returns risk.
Does this include taxes or fees?
No. Results are shown before any taxes on withdrawals and before investment fees, both of which reduce the amount actually available to spend.