Safe withdrawal rate
A withdrawal formula can tell you what works under chosen assumptions. Calling a rate safe requires a separate view of uncertainty, an acceptable failure risk and what happens if spending must change.
Last reviewed Methods and sources
A model result is conditional
For an illustrative $1 million balance, a 30-year, 2% constant real-return model supports $3,687.15 at each month-end. The formula spends the modeled balance down to zero at the selected horizon.
That result is exact only for the model’s assumptions. It is not a success probability, a market forecast, or a promise that the withdrawal will survive changing returns.
The grid compares hypothetical real returns and durations. A real return is after inflation; all shown withdrawals are in starting purchasing-power dollars. Taxes and fees are excluded.
| Duration | 0% real | 2% real | 4% real |
|---|---|---|---|
| 20 years | $4,167 | $5,050 | $6,022 |
| 30 years | $2,778 | $3,687 | $4,733 |
| 40 years | $2,083 | $3,019 | $4,135 |
Monthly payments from $1 million, exhausting the balance at the selected horizon. Constant real returns; no success probability.
Compare the spending demand first
This table starts with $1 million and divides each annual spending amount into equal month-end withdrawals. Returns are constant annual real assumptions, converted to effective monthly rates. Depletion times are rounded to one decimal year.
| Annual withdrawal | 0% real return | 2% real return | 4% real return |
|---|---|---|---|
| $30,000 | 33.3 years | 54.6 years | No modeled depletion |
| $40,000 | 25.0 years | 34.5 years | 102.6 years |
| $50,000 | 20.0 years | 25.5 years | 39.3 years |
At zero real return, $1 million divided by $40,000 per year gives 25 years. A higher assumed constant return extends the model’s timeline. The practical question is what happens when the assumed return is not delivered steadily.
“No modeled depletion” means growth under that exact constant-rate model covers the scheduled withdrawal. It is not an unlimited spending guarantee. The depletion calculator lets you change the balance, withdrawal and assumptions directly.
The order of returns matters
Take a simplified $100,000 portfolio and withdraw $10,000 after each year’s return. A 20% gain followed by a 20% loss ends at $78,000. Reverse those returns and the ending balance is $74,000.
Without withdrawals, either order would leave $96,000. With withdrawals, the same two returns produce a $4,000 difference.
This is a two-year arithmetic illustration of sequence risk, not a historical backtest. A constant-return calculator cannot reproduce that risk by using a single average.
| $100k start | Year one | Year two |
|---|---|---|
| Gain first | +20% $110,000 | −20% $78,000 |
| Loss first | −20% $70,000 | +20% $74,000 |
$10,000 is withdrawn after each annual return. Reversing the two returns changes the endpoint by $4,000.
What the sustainable-withdrawal formula answers
When r = 0: W = B ÷ n
B is the initial balance, r is the effective monthly return and n is the number of month-end payments. For an annual real return R, r = (1 + R)1/12 − 1, with R expressed as a decimal. The withdrawal calculator also handles beginning-of-month timing.
The formula answers: “What equal amount exhausts this balance over this many payments at this constant rate?” It does not answer: “What amount is sufficiently reliable across uncertain futures?” A requested remaining reserve would also change the calculation; the table above targets zero at the horizon.
Define what “safe” needs to cover
Duration: which spending horizon and whether money should remain afterward.
Risk: what range of returns is being examined and what counts as an unacceptable outcome.
Flexibility: whether spending reductions are possible, how large they can be and when they occur.
Spendable income: how fees, taxes and other income change the portfolio withdrawals needed.
The 4% rule page explains initial-percentage arithmetic. The strategy comparison distinguishes inflation-adjusted dollars from withdrawing a new percentage of the current balance. Neither convention supplies a personal safety guarantee.
Sources, calculations and review date
Reviewed . The tables use this site’s tested depletion and sustainable-withdrawal formulas. The two-year sequence example is original arithmetic: ($100,000 × 1.20 − $10,000) × 0.80 − $10,000 = $78,000; reversing the return order gives $74,000.
Fidelity’s May 26, 2026 retirement-withdrawal guidance supports the starting-percentage and inflation-adjustment convention discussed on the linked 4% page. No historical success rate, recommended personal withdrawal rate or probability estimate is asserted here. Educational information, not financial advice.
Questions and answers
What is the safe withdrawal rate for my retirement?
This site does not calculate a personal safe rate or a probability of success. It calculates outcomes under stated constant-return assumptions. A risk assessment also needs uncertain returns, the retirement horizon, taxes, fees and the ability to adjust spending.
Is a model’s sustainable withdrawal the same as a safe withdrawal?
No. Sustainable here means the formula funds the chosen schedule under its exact assumptions, usually ending at zero. A safe-rate claim would require a separate definition of acceptable risk and a model that measures that risk.
Why can the same average return lead to different outcomes?
Withdrawals change the balance exposed to later returns. In the two-year example, reversing the same gain and loss changes ending wealth because the $10,000 withdrawals occur between the returns.
Does “no modeled depletion” mean the withdrawal is safe forever?
No. It is a mathematical result under a constant return and an unchanged withdrawal rule. It does not forecast future markets, spending or tax rules and it does not establish a probability of lasting.