Safe Withdrawal Rate (SWR) Calculator
How Much Income Can You Generate?
Retirement Nest Egg
Withdrawal Rate (SWR)
Annual Income
$0
Total yearly withdrawal.
Monthly Income
$0
Estimated monthly income.
Historical Success Rate
Likelihood portfolio lasts 30+ years based on historical data.
Safe Withdrawal Rate (SWR)
The Safe Withdrawal Rate (SWR) is one of the most important concepts in retirement planning. It's a rule of thumb that determines the percentage of your portfolio you can withdraw each year without, in theory, ever running out of money.
The concept was popularized by the "Trinity Study," which analyzed historical market data to find a sustainable withdrawal rate. The study found that a 4% withdrawal rate had a very high probability of success over a 30-year retirement period. This calculator lets you explore how different SWRs affect your potential retirement income.
How to Use This Calculator
1. Enter Your Nest Egg
Input the total value of your retirement portfolio. You can sync this with your profile for convenience.
2. Select a Withdrawal Rate
Use the slider to choose the percentage of your portfolio you plan to withdraw each year. The historical success rate for your chosen percentage will be displayed.
3. See Your Potential Income
The calculator will show you the potential annual and monthly income you could receive from your portfolio based on your selected SWR.
Interpretation & Strategy
Choosing a Safe Withdrawal Rate involves a trade-off between income and risk.
A lower SWR (e.g., 3.5%) provides less annual income, but significantly increases the historical probability of your portfolio lasting through a long retirement. It's a more conservative approach.
A higher SWR (e.g., 4.5% or more) provides more income, but carries a greater risk of depleting your portfolio, especially if you retire into a market downturn (this is known as "sequence of returns risk").
What's the Next Step?
Your SWR directly influences your retirement target.
- See how your chosen SWR translates into the total nest egg you need with our FIRE Number Calculator.
Frequently Asked Questions
What is the 4% Rule?
The 4% Rule is a well-known guideline for retirement withdrawals, originating from a study called the Trinity Study. It suggests that if you withdraw 4% of your initial portfolio value each year, adjusted for inflation, your portfolio has a very high probability of lasting for at least 30 years.
Is the 4% Safe Withdrawal Rate still safe?
Whether the 4% rule is still 'safe' is a topic of much debate. Factors like longer lifespans, lower expected future market returns, and sequence of returns risk have led some financial planners to recommend a more conservative rate, such as 3.5% or lower. This calculator helps you explore the historical success rates of different SWRs.
What is Sequence of Returns Risk?
Sequence of Returns Risk is the danger that the timing of your investment returns is unfavorable. Experiencing poor market returns in the first few years of retirement can have a disproportionately negative impact on your portfolio's longevity, because you are withdrawing money from a shrinking portfolio, which can be difficult to recover from. This is why a 'safe' withdrawal rate is not a guarantee.