The short answer
- $1 million earning 5% a year, with $40,000 a year withdrawn and raised 2.5% a year for inflation, lasts about 38.9 years.
- Withdraw $50,000 instead and it lasts about 27.7 years; $60,000, about 21.6 years.
- To last exactly 30 years, the most you can take in year 1 is about $47,303.
- A 20% fall in the first year cuts the $40,000 plan from 38.9 to about 26.1 years.
How the calculator works
Each month it takes a twelfth of the year’s withdrawal from your balance, then adds a month’s growth on what is left. Each year the withdrawal rises with inflation if you choose. It stops when the balance reaches zero and reports how long that took, to the month, or that the money lasts more than 60 years.
To find the most you can take, it searches for the first-year withdrawal that leaves exactly nothing at the end of the period you plan for. Returns are the same every year unless you add a fall in the first year.
A worked example
- Withdrawal rate in year 14%
- Withdrawal in year 10$49,955
- Withdrawal in year 30$81,856
- Balance after 30 years$667,272
- Withdrawn over the life of the money$2,584,112
Growth pays for much of the spending: you take out about $2.6 million from a $1 million start. The balance even rises for the first decade, because 5% growth is more than the early withdrawals.
What happens year by year
| Year | Start of year | Withdrawn | End of year |
|---|---|---|---|
| 1 | $1,000,000 | $40,000 | $1,008,925 |
| 5 | $1,031,993 | $44,153 | $1,038,253 |
| 10 | $1,054,375 | $49,955 | $1,055,796 |
| 15 | $1,048,414 | $56,519 | $1,042,797 |
| 20 | $1,001,744 | $63,946 | $986,166 |
| 25 | $897,983 | $72,349 | $868,588 |
| 30 | $715,551 | $81,856 | $667,272 |
The turning point comes when the rising withdrawal overtakes the year’s growth. After that the balance falls faster each year, which is why the last years of a plan disappear quickly.
How the withdrawal rate changes things
Each extra percentage point takes years off the plan. Going from 4% to 5% cuts more than 11 years here. That is why a small trim to spending early in retirement is so powerful.
The 4% rule
In October 1994, financial planner William Bengen published a study in the Journal of Financial Planning. He tested every 30-year retirement starting from 1926 using actual US stock and bond returns and inflation. Withdrawing 4% of the starting balance, then raising the dollar amount with inflation each year, lasted at least 30 years in every period, even for someone who retired just before the Great Depression or the high inflation of the 1970s. Higher rates failed in some periods.
In 1998 three professors at Trinity University in Texas ran similar tests across different mixes of stocks and bonds and different lengths of retirement. Their work, known as the Trinity study, found that a 4% inflation-adjusted withdrawal from a portfolio with at least half in stocks very rarely ran out over 30 years in the historical data.
The 4% rule since 1994
In 2025 Bengen published a book updating his research with a broader mix of seven asset classes. His new "safe" starting rate for a 30-year retirement is about 4.7%. Other researchers argue for less, especially for early retirees with 40 or 50 years to fund, or when stock prices look expensive and bond yields are low.
A rule of thumb, not a promise
The 4% rule is based on one country’s past, assumes a fixed spending path, and ignores fees and taxes. Use it to sense-check a plan, then adjust as you go.
The most you can take
| Must last | First-year withdrawal | Withdrawal rate |
|---|---|---|
| 20 years | $63,661 | 6.37% |
| 25 years | $53,799 | 5.38% |
| 30 years | $47,303 | 4.73% |
| 35 years | $42,729 | 4.27% |
| 40 years | $39,356 | 3.94% |
These figures use all the money, leaving nothing at the end. With a steady 5% return the 30-year figure is close to Bengen’s new 4.7%; with a 20% fall in the first year it drops to $36,268. If you take flat withdrawals that don’t rise with inflation, the 30-year maximum is higher, $63,349, but its buying power shrinks every year.
How returns change the answer
| Return a year | Money lasts |
|---|---|
| 3% | 27.0 years |
| 4% | 31.5 years |
| 5% | 38.9 years |
| 6% | 56.0 years |
| 7% | More than 60 years |
The gap between return and inflation is what matters. At 7% returns and 3% inflation, a 4% withdrawal lasts more than 60 years and 5% lasts about 38.7 years. Choose a return you would be comfortable relying on, after fees.
Sequence-of-returns risk
- $40,000 a year rising
- Lasts 38.9 years
- $50,000 a year rising
- Lasts 27.7 years
- $40,000 a year rising
- Lasts 26.1 years
- $50,000 a year rising
- Lasts 19.4 years
The order of returns matters once you are withdrawing. A fall at the start forces you to sell more shares at low prices to fund the same spending, and those shares are not there to recover. The same fall twenty years in would do much less harm. This is the main reason retirement plans need a margin of safety.
Raising withdrawals with inflation
Raising withdrawals with inflation keeps your spending power steady, but it costs money. Taking a flat $40,000 a year from $1 million at 5%, the money never runs out in our test, and after 60 years the balance would be over $4 million, but $40,000 in 30 years buys only about what $19,000 buys today. Most people need their income to keep up, at least for essentials. The inflation calculator shows how fast prices have risen in the past.
Withdrawing a percentage instead
| Year | Withdrawn | In today's dollars | Balance at the end |
|---|---|---|---|
| 1 | $40,000 | $40,000 | $1,008,925 |
| 10 | $43,330 | $34,696 | $1,092,918 |
| 20 | $47,356 | $29,623 | $1,194,471 |
| 30 | $51,756 | $25,291 | $1,305,459 |
A percentage withdrawal can’t run out, because you always take a share of what is left. The cost is that income follows the markets: after a 20% fall, your income falls 20% too. And unless returns beat inflation by more than the withdrawal rate, your real income shrinks over time, as here.
Flexible spending rules
- Skip the raise after a loss: don’t increase withdrawals for inflation in a year when your investments fell.
- Guardrails: cut spending by, say, 10% if your withdrawal rate rises well above where it started, and raise it if the rate falls well below.
- Floor and upside: cover essentials with guaranteed income and spend from investments only on extras.
Being willing to trim spending in bad years lets most people start with a higher withdrawal safely.
Social Security and other income
Your savings only need to fill the gap between what you spend and your guaranteed income. If you spend $70,000 a year and Social Security and a pension pay $30,000, you withdraw about $40,000. Our retirement calculator works out that gap and whether you are saving enough to fill it. Each year you delay Social Security past full retirement age, up to 70, raises your benefit by 8%, which reduces what your savings must provide later.
Taxes on withdrawals
Withdrawals from a traditional 401(k) or IRA are taxed as ordinary income, so $40,000 withdrawn might leave $35,000 to $36,000 to spend, depending on your bracket and state. Qualified Roth withdrawals are tax-free. In a taxable brokerage account, only the gain in what you sell is taxed, often at 0% or 15%. Enter an average tax rate under More options to see income after tax.
Which accounts to draw from first
A common order is taxable accounts first, then traditional accounts, then Roth, letting tax-free money grow longest. In practice, many retirees blend them to fill low tax brackets each year, for example taking traditional IRA money up to the top of the 12% bracket or converting some to Roth in the years between retiring and claiming Social Security.
Required minimum distributions
From age 73 (75 for people born in 1960 or later), you must take a minimum amount from traditional IRAs and most 401(k)s each year, based on your balance and an IRS life expectancy factor. If your planned withdrawals are smaller, the RMD sets a floor; you can reinvest what you don’t spend in a taxable account. Missing an RMD can cost a 25% excise tax on the shortfall. The RMD calculator works out your amount.
Keeping a cash buffer
Holding one to two years of withdrawals in cash or short-term bonds lets you avoid selling stocks after a fall. You spend from the buffer while markets recover, then refill it in good years. It lowers your average return a little, but it protects against the sequence risk that does the most damage.
Adding guaranteed income
Using part of your savings to buy an immediate annuity turns it into income for life, so that part can’t run out however long you live or however markets do. The trade-off is less flexibility and less left for heirs. The annuity calculator shows what a lump sum could pay.
Review your plan each year
A withdrawal plan isn’t set once. Each year, check your balance, your spending and the withdrawal rate it now implies. If markets have done well, you may be able to spend more; if they have done badly, small cuts now protect the years ahead. Run the calculator again with your new balance and the years you still need to fund.
Key numbers
| Item | Figure |
|---|---|
| Bengen's safe starting rate (1994) | 4% |
| Bengen's updated rate (2025) | About 4.7% |
| $1m, 30 years, 5% return, 2.5% inflation: maximum | $47,303 |
| RMD starting age | 73 (75 if born 1960 or later) |
| Penalty for a missed RMD | 25% (10% if corrected in time) |
| Delayed retirement credit after full retirement age | 8% a year, to 70 |