Calculator Inputs
Example Data Table
| Portfolio ($) | Withdrawal ($/yr) | Years | Return (%) | Volatility (%) | Inflation (%) | Fees (%) | Tax (%) | Other Income ($/yr) |
|---|---|---|---|---|---|---|---|---|
| 500,000 | 20,000 | 30 | 6.5 | 12 | 2.5 | 0.5 | 12 | 6,000 |
| 750,000 | 30,000 | 35 | 6.0 | 14 | 3.0 | 0.7 | 15 | 10,000 |
| 300,000 | 15,000 | 25 | 5.5 | 10 | 2.2 | 0.4 | 10 | 0 |
Formula Used
Core rate
The initial safe withdrawal rate is calculated as:
SWR(%) = (Annual Withdrawal / Portfolio Balance) × 100
Simulation engine
Each year applies a simulated return, adds any contributions, then subtracts an inflation-adjusted withdrawal. Taxes gross-up withdrawals, and other income reduces the withdrawal need.
How to Use This Calculator
- Enter your current portfolio balance and retirement horizon.
- Choose dollars or percent for the withdrawal input method.
- Set return, volatility, inflation, fees, and tax assumptions.
- Add other income offsets like pension or benefit payments.
- Run the calculation and review probability and balances.
- Download CSV/PDF to share with your plan administrator.
FAQs
1) What does “success probability” mean here?
It is the share of simulations where the portfolio never drops below zero during the chosen horizon, given your withdrawal, inflation, and cost assumptions.
2) Why does volatility matter if average return is unchanged?
Volatility increases sequence-of-returns risk. Early losses combined with withdrawals can permanently reduce the base that later gains compound from.
3) How are taxes handled in the calculation?
The tool treats your withdrawal as after-tax spending need, then grosses it up using the tax rate so the portfolio withdrawal covers taxes too.
4) What counts as “other income offset”?
Any predictable annual income that reduces portfolio withdrawals, such as pension payments, annuity income, or employer-provided retirement benefits.
5) Is a 4% rate always safe?
No. Safety depends on horizon, portfolio mix, fees, taxes, and market conditions. Use your inputs to see if a 4% start rate fits your risk target.
6) What does “rate that meets target success” mean?
The tool searches for a starting rate that reaches your chosen success target (for example 0.85) under the same assumptions and simulation settings.
7) Should I increase simulation runs for accuracy?
More runs can stabilize results, but take longer. Try 2,000 first, then raise to 5,000 if the probability feels noisy between runs.
8) Can I use this for short-term withdrawals?
Yes, but use an appropriate horizon and volatility. For short periods, cash needs and spending flexibility often matter more than long-term averages.