Our retirement withdrawal calculator is a tool that helps retirees and pre-retirees determine safe, sustainable withdrawal rates from their retirement savings.

Using this calculator to determine annual withdrawals helps avoid running out of funds, supporting effective financial planning for a sustainable retirement income.

Our calculator uses your financial inputs to calculate and summarize your retirement account's withdrawals and balances until the funds are exhausted.

Your Calculator Inputs

To get started, we only require five fields:

1. Retirement Savings Balance: The combined balances of all your retirement products and savings accounts, such as 401(k) plans, individual retirement accounts (IRAs), stocks, mutual funds, and any other accounts designated for retirement.
2. Monthly Income Needed: The before-tax amount you expect to need monthly in retirement.
3. Monthly Social Security Income: If you qualify for social security, include the monthly benefit payment.
4. Monthly Pension Income: If your employer offers a pension plan as part of your benefits package, include your monthly retirement check amount.
5. Other Monthly Income: Any additional reliable retirement income sources of monthly fixed income, such as rental property income, retirement annuity payments, alimony payments, or money received from a trust.

Advanced Inputs

Adjusting default assumptions enables you to personalize your outcomes.

• Annual Income Increases: The annual percentage of additional income you expect to need each year due to the rate of inflation (default is 3%, range 0% to 10%). For up-to-date Consumer Price Index results, visit the U.S. Bureau of Labor and Statistics - Latest Numbers.
• Annual Social Security Increases: The annual rate increase in your yearly Social Security Income benefit (default is 3%, range 0% to 10%). For SSI Cost of Living adjustments, visit the Social Security Administration.
• Annual Pension Increases: The percentage increase in your yearly pension benefit, including any yearly adjustment for inflation or cost of living (default is 3%, range 0% to 10%).
• Other Annual Income Increases: The percentage increase in your other fixed income sources (default is 3%, range 0% to 10%).
• Annual Before-Tax Return: The annual rate of return you expect to earn on your savings at retirement before taxes (default is 4%, range -12% to 12%).

Understanding Your Results

Our Retirement Withdrawal Calculator analysis estimates the approximate number of years your retirement funds will last and the total withdrawals over that time. The chart indicates your Retirement Funds Balance Over Time based on your Monthly Income Needed and income inputs.

Steps To Interpret Your Results

Interpreting your results from our retirement withdrawal calculator allows you to translate those numbers into actionable steps for your financial future. Here's a breakdown of how to analyze and understand the information:

1. Compare to Your Goals: Does the calculator show your money will last, or is there a gap between your current projection and your goal?
2. Consider the "What-ifs": Use the calculator to explore how varying monthly incomes or savings balances may affect your results.
3. Don't Panic: When the numbers aren't ideal, it doesn't signal failure; rather, it presents a valuable opportunity to refine your strategy for better results.

A retirement advisor can help you understand the overall picture, considering factors beyond simple calculations, such as taxes, pension, Social Security benefits, and overall financial health.

Why a Safe Withdrawal Rate Matters in Retirement

A safe withdrawal rate is essential in retirement because it helps protect against depleting savings too quickly, balancing immediate spending needs with long-term financial security.

Planning your retirement withdrawals wisely can make your savings last and provide lifelong financial stability. Discover strategies like bucketing, systematic withdrawals, and annuities to help secure a dependable retirement income that fits your lifestyle.

Factors Impacting How Long Your Retirement Savings Will Last

• Retirement Age: Retiring early requires your savings to last longer, while retiring later gives you more time to save and reduces your reliance on those savings for income.
• Spending Habits: Spending heavily in retirement depletes savings quicker than living frugally. It's crucial to create and adhere to a retirement budget.
• Investment Returns: Market performance significantly impacts savings; higher investment returns extend them, while poor investment performance depletes them faster.
• Inflation: Inflation diminishes the purchasing power of savings, making inflation-adjusted withdrawals essential to sustain your living standard.
• Unexpected Expenses: Unplanned expenses, such as medical bills or home repairs, can significantly reduce retirement savings.
• Longevity: A longer lifespan requires your savings to last more years.
• Pensions and Social Security: These income sources can supplement your retirement account withdrawals, extending the longevity of your savings. Individuals born in 1960 or later receive full Social Security benefits at age 67, with an option for reduced benefits starting at 62.
• Withdrawal Rate: Withdrawing from savings at about 4% annually can significantly affect how long your funds last.

Benefits of Using a Retirement Withdrawal Calculator

• Provides Financial Clarity: A retirement withdrawal calculator helps visualize your future income based on various withdrawal rates. This clarity lets you see how long your retirement savings may last under different scenarios, providing a realistic picture of your financial future.
• Supports Informed Decision-Making: By calculating projected income and spending, you can make informed decisions about your retirement. Whether adjusting your withdrawal rate, altering spending habits, or planning for potential investment returns, a calculator lets you explore these options confidently.
• Helps Avoid Over- or Under-Spending: Using a calculator allows you to strike a balance between spending too quickly, which risks depleting your savings, and underspending, which could limit your quality of life. It helps ensure you’re not compromising future stability for short-term enjoyment or vice versa.
• Accounts for Inflation: This feature gives a more accurate view of your future purchasing power and helps you plan for economic changes that could affect your savings.
• Promotes Financial Security: A clear, data-driven retirement withdrawal plan can help reduce financial stress. Knowing you’ve prepared a sustainable withdrawal strategy enables you to enjoy retirement without worrying about outliving your savings.
• Allows Comparison of Different Withdrawal Strategies: A calculator lets you test various withdrawal methods, such as the 4% rule, flexible withdrawals, or annuities, and compare the outcomes. This versatility helps you choose a strategy that aligns best with your retirement goals and risk tolerance.
• Encourages Regular Financial Check-Ins: A retirement withdrawal calculator can be used periodically to assess your retirement plan if your circumstances or financial goals change. This ongoing assessment helps you adapt your strategy to maintain financial stability throughout retirement.

Each of these benefits contributes to a secure, comfortable, and well-planned retirement, providing the confidence to enjoy your future without financial worry.

The Bottom Line

Retirement calculators are tools, not crystal balls. Use them as a starting point and adjust your plan over time, ideally with the help of an experienced financial advisor.

Qualified professionals offer clients personalized guidance on investment objectives, retirement planning, taxes and tax strategies, estate planning, insurance, debt management, budgeting, education funding, and financial goal setting to achieve financial stability and growth.

Related Calculators

• Retirement Calculator
• 401(k) Growth Calculator
• Retirement Cost of Living Calculator

Sources

1. U.S. Bureau of Labor and Statistics - Latest Numbers. https://www.bls.gov/cpi/latest-numbers.htm
2. Social Security Administration - Cost-of-Living Adjustment (COLA) Information. https://www.ssa.gov/cola/