Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A withdrawal plan's stated success depends heavily on how the earliest years of returns actually play out, not just the average return assumed across the whole horizon, because withdrawals taken during an early downturn lock in losses on a smaller remaining base in a way that a smooth, average-return projection doesn't capture at all.
Before you rely on it
What to check
Stress-test the withdrawal plan specifically against a poor-early-returns scenario and a longer-than-expected horizon, not just the average-case projection.
The common error
Where people go wrong with investment withdrawal calculator
Trusting a single average-return projection of a withdrawal plan without stress-testing an early-downturn scenario. The identical average return produces very different real outcomes depending on when within the horizon the weak years actually land.
Sensitivity evidence
How expected annual return changes the estimated ending balance
| Expected annual return | Estimated ending balance | Total withdrawals | Years funded |
|---|---|---|---|
| 3.0% | $0.00 | $666,161 | 18.0 years |
| 4.0% | $0.00 | $756,888 | 20.0 years |
| 5.0%worked example | $0.00 | $884,999 | 23.0 years |
| 6.0% | $56,284 | $1,024,733 | 25.0 years |
| 7.0% | $331,391 | $1,024,733 | 25.0 years |
Every input, tested
Which input moves the estimated ending balance most
| Input | Tested from | To | Estimated ending balance at each end | Swing |
|---|---|---|---|---|
| Starting investment | $450,000 | $550,000 | $0.00 to $23,602 | $23,602 |
| First-year withdrawal | $27,000 | $33,000 | $38,174 to $0.00 | $38,174 |
| Expected annual return | 4.0% | 6.0% | $0.00 to $56,284 | $56,284 |
| Annual withdrawal inflation | 1.5% | 3.5% | $34,255 to $0.00 | $34,255 |
| Planned withdrawal years | 19.0 years | 31.0 years | $149,515 to $0.00 | $149,515 |
Two variables at once
Estimated ending balance by expected annual return and starting investment
| Expected annual return \ Starting investment | $400,000 | $500,000 | $600,000 |
|---|---|---|---|
| 3.0% | $0.00 | $0.00 | $0.00 |
| 4.0% | $0.00 | $0.00 | $0.00 |
| 5.0% | $0.00 | $0.00 | $192,920 |
| 6.0% | $0.00 | $56,284 | $485,471 |
| 7.0% | $0.00 | $331,391 | $874,134 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Starting investment | $500,000 |
| First-year withdrawal | $30,000 |
| Expected annual return | 5.0% |
| Annual withdrawal inflation | 2.5% |
| Planned withdrawal years | 25.0 years |
| Estimated ending balance | $0.00 |
| Total withdrawals | $884,999 |
| Years funded | 23.0 years |
Complete evidence
Full projection schedule
Show all 23 rows
| Period | Opening balance | Contribution | Growth | Ending balance |
|---|---|---|---|---|
| Year 1 | $500,000 | -$30,000 | $25,000 | $495,000 |
| Year 2 | $495,000 | -$30,750 | $24,750 | $489,000 |
| Year 3 | $489,000 | -$31,519 | $24,450 | $481,931 |
| Year 4 | $481,931 | -$32,307 | $24,097 | $473,721 |
| Year 5 | $473,721 | -$33,114 | $23,686 | $464,293 |
| Year 6 | $464,293 | -$33,942 | $23,215 | $453,565 |
| Year 7 | $453,565 | -$34,791 | $22,678 | $441,453 |
| Year 8 | $441,453 | -$35,661 | $22,073 | $427,865 |
| Year 9 | $427,865 | -$36,552 | $21,393 | $412,706 |
| Year 10 | $412,706 | -$37,466 | $20,635 | $395,875 |
| Year 11 | $395,875 | -$38,403 | $19,794 | $377,266 |
| Year 12 | $377,266 | -$39,363 | $18,863 | $356,767 |
| Year 13 | $356,767 | -$40,347 | $17,838 | $334,259 |
| Year 14 | $334,259 | -$41,355 | $16,713 | $309,616 |
| Year 15 | $309,616 | -$42,389 | $15,481 | $282,708 |
| Year 16 | $282,708 | -$43,449 | $14,135 | $253,395 |
| Year 17 | $253,395 | -$44,535 | $12,670 | $221,529 |
| Year 18 | $221,529 | -$45,649 | $11,076 | $186,957 |
| Year 19 | $186,957 | -$46,790 | $9,348 | $149,515 |
| Year 20 | $149,515 | -$47,960 | $7,476 | $109,031 |
| Year 21 | $109,031 | -$49,158 | $5,452 | $65,324 |
| Year 22 | $65,324 | -$50,387 | $3,266 | $18,203 |
| Year 23 | $18,203 | -$19,113 | $910 | $0.00 |
Where the inputs come from
Starting investment is the balance available for withdrawals. First-year withdrawal is what you plan to take in the first year, and it grows each year by the withdrawal inflation rate. Expected annual return is a steady assumption for the portfolio, and planned withdrawal years is how long the money must last. Use a return after fees, and a cautious inflation figure of 2.5% to 3%.
Using the estimated ending balance in a real decision
A 6% first-year withdrawal is above the level many planners treat as sustainable.
When the result stops applying
A steady return hides sequence-of-returns risk: poor returns in the first years of retirement hurt far more than the same returns later, and can exhaust a portfolio that survives on average. Taxes on withdrawals, required minimum distributions and changing spending are not modeled. Use a lower return case as a stress test.
What to compare it with
The retirement goal calculator finds the balance you need, and the FIRE and safe withdrawal pages cover the same question from the early-retirement angle. The Social Security and pension calculators show income that can reduce withdrawals. Test a version with a market decline in year one.
People also ask
Frequently asked questions
What is a safe withdrawal rate?
Many planners use about 4% of the starting balance, adjusted for inflation, for a 30-year horizon, though the right rate depends on the length of retirement, asset mix and flexibility.
What is sequence-of-returns risk?
It is the danger that poor market returns early in retirement, while you are withdrawing, deplete the portfolio faster than the same returns would later.
Should withdrawals rise with inflation?
Usually, if you want the same purchasing power. Some retirees spend less in later years, which improves the odds the money lasts.