Project portfolio sustainability, test safe withdrawal rates, model inflation-adjusted income, and find your portfolio depletion age
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| Withdrawal rate | Annual withdrawal | Monthly income | Depletion age | Ending balance |
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Founder & CEO, Toolraxy
Faiq Ur Rahman is a web designer, digital product developer, and founder of Toolraxy, a growing platform of web-based calculators and utility tools. He specializes in building structured, user-friendly tools focused on health, finance, productivity, and everyday problem-solving.
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The 4% rule is a starting point, not a plan. It came from a study of 30-year retirements using historical US returns. Change the horizon to 40 years, drop the return assumption to 5%, and the safe number drops below 4%. The rule doesn’t tell you when your specific portfolio runs out.
This calculator does. It simulates each year of retirement, subtracting your withdrawal, applying your return assumption, and adjusting for inflation. It shows the age at which the portfolio hits zero, or confirms it survives the full horizon. Four withdrawal strategies are available: inflation-adjusted, fixed nominal, percentage of portfolio, and guardrails. The guardrails option flexes spending based on how the portfolio performs, which is what most real retirees actually do.
Set your currency. Every money field updates to the symbol you pick.
Enter the portfolio balance at retirement. Your total investable assets on day one of retirement.
Add the initial annual withdrawal. The amount you plan to pull out in year one.
Enter your current age and retirement horizon. Thirty years is standard for someone retiring at 65.
Set the expected portfolio return. Six percent is a common nominal assumption for a balanced portfolio.
Enter an inflation rate. 2.5% is a reasonable long-run assumption.
Choose a withdrawal strategy. Inflation-adjusted is the default. Guardrails flexes spending with market performance.
Add other income and tax if you want the after-tax picture. Social Security or a pension changes the total income line, not the portfolio math.
The calculator runs a year-by-year simulation. Each year does the same four things in order.
Formula: Withdrawal (Year N) = Withdrawal (Year N−1) × (1 + Inflation Rate) [inflation-adjusted strategy]
Formula: Balance (Year N) = (Balance (Year N−1) − Withdrawal (Year N)) × (1 + Return Rate)
The withdrawal comes out first, then the remaining balance grows at your return assumption. That order matters. Money withdrawn in January doesn’t earn the year’s return.
The withdrawal rate is the initial annual withdrawal divided by the starting portfolio.
Formula: Withdrawal Rate = Initial Annual Withdrawal ÷ Portfolio Balance × 100
Four strategies change how withdrawals evolve:
Inflation-adjusted: each year’s withdrawal grows by the inflation rate. Real purchasing power stays flat.
Fixed nominal: the withdrawal stays the same dollar amount. Purchasing power erodes every year.
Percentage of portfolio: the withdrawal is a fixed percentage of the current balance. It flexes automatically with markets.
Guardrails: the withdrawal is inflation-adjusted unless it drifts more than 10% from a 4%-of-current-balance target. Then it resets.
Worked Example
You’re 63 with $880,000 saved. You plan to withdraw $38,000 in year one, growing with inflation at 2.4%. Your portfolio return assumption is 5.5% nominal. Horizon is 32 years.
Step 1: Withdrawal rate = $38,000 ÷ $880,000 = 4.32%.
Step 2: Monthly income in year one = $38,000 ÷ 12 = $3,167.
Step 3: Run the simulation. The portfolio survives all 32 years with an ending balance of $412,600. No depletion.
Step 4: Total withdrawn over 32 years = $1,685,400. That’s more than the starting balance because inflation grew the withdrawals and the portfolio kept compounding.
Step 5: Switch the scenario comparison to the 5% rate. Annual withdrawal becomes $44,000, monthly $3,667. Depletion age: 81. The portfolio runs out 14 years early.
Step 6: Switch to guardrails strategy at the original 4.32% rate. The portfolio survives but total withdrawals drop to $1,502,100 because the guardrails cut spending during down years.
For a 30-year retirement with a balanced portfolio, 3.5% to 4.5% has historically been safe. The 4% rule is the classic midpoint. Longer horizons and lower return assumptions push the safe rate lower. The interpretation table grades any result.
At a 4% withdrawal rate, $1 million pays $40,000 a year, inflation-adjusted. With a 5.5% nominal return and 2.5% inflation, that plan historically survives 30 years. Withdraw 6% ($60,000 a year) and the portfolio depletes well before year 30.
The 4% rule says you can withdraw 4% of your starting balance in year one, then adjust for inflation each year, for a 30-year retirement. It came from US historical returns. It’s still a useful starting point, but lower expected returns mean many planners now use 3.5%.
Inflation increases your withdrawals each year to maintain purchasing power. A 4% withdrawal on a $1 million portfolio becomes $40,000 in year one, $41,000 in year two at 2.5% inflation, and roughly $51,200 after 10 years. Without inflation adjustments, real spending falls about 22% over that period.
Guardrails flex your spending based on portfolio performance. When the portfolio grows, you take a little more. When it shrinks, you take less. The calculator resets the withdrawal when it drifts more than 10% from a 4%-of-current-balance target. This flexibility lets you start with a higher withdrawal rate.
Inflation-adjusted is the simplest and most predictable. Guardrails is more sustainable because it adapts to markets. Percentage-of-portfolio is the safest mathematically but produces volatile income. The right choice depends on how much income flexibility you can tolerate.
A balanced 60/40 portfolio has historically returned 6% to 7% nominal. A stock-heavy portfolio runs 7% to 8%. Conservative allocations run 4% to 5%. Use a number you’d defend in a bad decade. Running the plan at 5% instead of 7% is a useful stress test.
Taxes reduce your spendable income but don’t change the portfolio math unless you model them as an extra withdrawal. The calculator lets you enter an effective tax rate to see after-tax income. If your withdrawals come from a Traditional IRA or 401(k), those dollars are taxed as ordinary income.
You’d rely on other income sources, reduce spending, or return to work. The calculator’s depletion age tells you exactly when the portfolio runs out. Use it as an early warning: if depletion age is well before your life expectancy, lower the withdrawal rate or extend the horizon with guardrails.
Possibly, but the margin is thinner. A 5% rate is above the classic safe zone. It works if the horizon is shorter, returns exceed assumptions, or spending flexes during bad years. A 40-year early retirement at 5% fixed has a high depletion risk. Guardrails improve the odds.
Social Security reduces how much you need to pull from the portfolio. If you need $60,000 a year and Social Security pays $25,000, the portfolio only needs to cover $35,000. That’s a much lower withdrawal rate on the same portfolio, which dramatically improves sustainability.
No. It uses a smooth average return every year, which is what most retirement calculators do. Real markets have good years and bad years in unpredictable order. A bear market in the first five years of retirement hurts more than one in year 20. Guardrails partially address this by flexing spending.
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