Retirement Drawdown Calculator
Drawdown is the phase where you stop adding and start spending. This calculator models it month by month — growth, inflation-adjusted withdrawals and taxes — and shows when the pot runs dry and how much you can safely draw.
Accumulation vs. drawdown
Saving for retirement is forgiving: a bad year early is smoothed out by decades of contributions. Drawdown is the opposite. You are selling assets every month, so a market fall in the first few years of retirement does permanent damage — the shares you sold at the bottom never recover. That is why retirement drawdown planning is less about maximising return and more about not being forced to sell in a downturn.
How the calculator works
Each month the balance earns one month of return, then the withdrawal is taken out. Every 12 months the withdrawal is increased by the inflation rate so your spending power stays level. If you enter a tax rate, each withdrawal is grossed up so the after-tax amount you keep matches the number you typed. The calculator stops when the balance hits zero, or after 100 years if it never does.
The "to last 20 / 25 / 30 years" figures are solved by bisection: the largest starting withdrawal that still survives that horizon under the same return and inflation assumptions.
Drawdown strategies compared
| Strategy | How it works | Best for |
|---|---|---|
| Constant inflation-adjusted (4% rule) | Fixed real income; what this calculator models | Simple budgets, pension-like income |
| Percentage of portfolio | Withdraw e.g. 5% of whatever the balance is each year | Never runs out, but income swings |
| Guardrails (Guyton–Klinger) | Start higher (5%+), cut 10% after bad years, raise after good ones | Flexible spenders wanting more income |
| Bucket strategy | 1–3 years cash, 4–10 years bonds, rest stocks; refill buckets in good years | People who want to avoid selling in a crash |
| RMD-based | Withdraw balance ÷ remaining life expectancy | Those who want to spend it all safely |
Choosing realistic inputs
- Annual return. 4–5% is a conservative planning number for a balanced portfolio; 6–7% is closer to long-run history for 60/40; cash and CDs are 3–5% today but fall when rates fall.
- Inflation. The Federal Reserve targets 2%; the 30-year U.S. average is about 2.5%. Healthcare inflation runs higher, so retirees with large medical costs should test 3–3.5%.
- Withdrawal. Use what you actually spend, minus guaranteed income (Social Security, pension, annuity). That net gap is what savings must cover.
Tax-efficient withdrawal order
Which account you draw from matters almost as much as how much. The conventional sequence is taxable brokerage first (to let tax-deferred money keep compounding), then traditional 401(k)/IRA, then Roth last. Between retirement and the start of required minimum distributions (age 73, rising to 75 in 2033), many retirees sit in a low bracket and can convert traditional money to Roth at 10–12% — a move that can add years to how long a portfolio lasts after tax. Enter your blended expected tax rate in the calculator to see the gross withdrawals you will actually need.
Frequently asked questions
What is a retirement drawdown calculator?
A tool that simulates spending down a retirement pot: it applies investment growth, subtracts inflation-adjusted withdrawals (and taxes), and reports how many years the money lasts or how much can be safely withdrawn.
What is a safe drawdown rate?
Around 4% of the starting balance per year, adjusted for inflation, is the classic benchmark for a 30-year retirement. Longer horizons or lower return expectations point to 3–3.5%. This page computes the rate implied by your own numbers.
How do taxes affect drawdown?
Withdrawals from traditional 401(k) and IRA accounts are taxed as ordinary income, so to spend $4,000 at a 15% rate you must withdraw about $4,706. The tax field on the calculator applies exactly that gross-up.
Should I draw down or buy an annuity?
An annuity converts part of the balance into guaranteed lifetime income and removes longevity risk but sacrifices flexibility and legacy. Many planners suggest annuitising just enough to cover essential expenses alongside Social Security, and drawing down the rest.
Related calculators
SavingsLast calculators are educational estimates. They assume a constant average return and steady inflation; real markets are volatile and sequence-of-returns risk can shorten how long money lasts. Nothing here is financial, investment, tax, or legal advice. Consult a qualified professional before making decisions.