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How much can you safely withdraw from retirement savings each year without running out of money? The relationship between your withdrawal rate, your savings balance, and your resulting annual income is simple math, but it's central to retirement planning.
This calculator works in either direction: find your annual income from a given withdrawal rate, or find the withdrawal rate needed to reach a desired annual income.
How it works
Choose whether you know your withdrawal rate or your desired annual income. If you know the rate, the calculator multiplies it by your savings to find your annual (and monthly) income. If you know your desired income, it divides that by your savings to find the required withdrawal rate.
- Enter what do you know?.
- Enter retirement savings ($).
- Enter withdrawal rate (%).
- Enter desired annual income ($).
- Click Calculate to see your results.
Examples
The "4% rule" on $1 million
A 4% withdrawal rate on $1,000,000 in retirement savings produces $40,000 in annual income, or about $3,333 per month.
Who should use it
- Quickly estimating retirement income from a target withdrawal rate like the "4% rule."
- Finding what withdrawal rate would be needed to support a specific desired retirement income.
Industry applications
- Retirement planning and financial advising
- Personal finance education
Advantages
- Works in both directions — from rate to income, or from desired income to required rate.
- Simple, transparent math with no hidden assumptions.
Limitations
- Doesn't model multi-year sustainability, inflation adjustments, or investment returns during retirement.
Common mistakes to avoid
- Treating a specific withdrawal rate (like 4%) as a universal guarantee rather than a historically-based guideline that depends on market conditions and time horizon.
- Forgetting that a withdrawal rate calculation for a single year doesn't account for how the balance and required income may change over a multi-decade retirement.
Best practices
- Use this calculator as a starting point for a single year's numbers, not a substitute for a comprehensive, multi-year retirement projection that accounts for inflation and investment returns.
Tips
- For a more complete picture, use this calculator alongside a full retirement projection tool that accounts for inflation, investment returns, and your specific retirement timeline.