What’s the 4% Rule in Retirement? Safe Withdrawal Rate in Retirement Calculator

Abstract

A safe withdrawal rate is what percentage of your retirement portfolio you can pull out every year to live on, without running out of money before you croak. The 4% Rule in Retirement Rewind to the '90s when a financial planner named Bill Bengen ran an interesting study: he analyzed stock market data from the previous 75 years and found that if retirees withdraw 4.2% of their nest egg each year, mathematically their savings is nearly certain to outlive them. The problem is the stock market doesn't rise by a uniform 10% each year: it drops by 23% one year, surges by 35% another year, and wobbles its way upward by 8% the next year. How Inflation Impacts Safe Withdrawal Rates "Whoa there, what about inflation? That $40,000 won't be worth as much in ten years from now!" The 4% withdrawal rate applies to the first year of retirement. Ditch Your Day Job: How to Retire Early with Rental Income How Much Do You Need to Retire? Before you can calculate how much you need to save for retirement, you need to know how much income you want in retirement. Withdrawal Rates in Retirement Calculator So how much do you need to save for retirement, based on your target withdrawal rate? Plug your target annual income and withdrawal rate in retirement into this calculator: It's pretty simple math, but a withdrawal rate in retirement calculator still lets you play around with different numbers easily. Sample Retirement Income Streams Say you want $60,000 per year in retirement income.