$5,000 a month spends 50% more than a 4% first-year draw
On $1 million, a $40,000 annual draw equals about $3,333.33 monthly. A $5,000 payment requires $60,000 annually. At zero real return, those schedules last 25 years and 16 years eight months respectively.
Convert the annual amount before comparing
The difference is $20,000 a year, or roughly $1,666.67 each month. After ten years with no growth, the $40,000 schedule leaves $600,000; the $60,000 schedule leaves $400,000. This comparison changes spending while holding the investment assumption still.
$600,000 versus $400,000 remains at year ten. Spending is constant in purchasing power, with equal month-end payments.
$40,000, $60,000 or $72,000 a year
The first row divides a $40,000 annual draw into equal monthly payments. Each real-return column keeps purchasing-power spending unchanged.
| Monthly draw | 0% real | 2% real | 4% real |
|---|---|---|---|
| $3,333.33 | 25y 0m | 34y 7m | 102y 8m |
| $5,000 | 16y 8m | 20y 3m | 27y 2m |
| $6,000 | 13y 11m | 16y 4m | 20y 2m |
Final dates include a partial payment when needed. “No depletion” assumes the stated constant growth continues.
The account percentage can mean two different rules
Taking 4% of the initial balance and then adjusting the dollar payment for inflation differs from taking 4% of each year’s remaining balance. If a later opening balance were $800,000, 4% of that current balance would be $32,000. It would not preserve the original $40,000 purchasing-power target.
Make the monthly equivalent precise
The calculator uses $40,000 divided by twelve without rounding away the fractional cents. The table rounds the monthly label for readability. Typing $3,333 instead would be a slightly smaller annual withdrawal, so an otherwise identical projection could finish on a different scheduled payment.
Questions about this calculation
Can I retire on $1 million using the 4% rule?
The rule translates the starting balance into a $40,000 first-year withdrawal. Whether that covers your needs, and how much risk it carries, requires more than the balance and percentage. This page compares spending schedules, not a probability of retirement success.
Is $4,000 a month the same as 4% of $1 million?
No. $4,000 a month is $48,000 annually, or 4.8% of the starting million. Four percent is $40,000 annually.
Why does $5,000 monthly reach zero sooner?
It removes $60,000 per year instead of $40,000. With no real investment gain, the larger schedule uses the account in 200 payments instead of 300.
Check the assumptions
Original scenarios, reviewed October 25, 2026. Monthly calculation method. Return, income and expense amounts are assumptions; no market forecast or personal recommendation is made.
The starting-percentage convention is described in Fidelity’s May 26, 2026 withdrawal guide.