Retirement Drawdown Calculator

Everything else in investing is about accumulation — building the pile. Retirement flips the question: now you're spending the pile down, and the thing that matters is whether it outlasts you. The headline tool is the 4% rule: withdraw about 4% of your starting balance in year one, raise that dollar amount with inflation each year after, and a 30-year retirement has survived the vast majority of historical markets. The rule has a tidy corollary — your 'number' is roughly 25× your annual spending (1 ÷ 4%), so a $40,000-a-year life needs about a $1,000,000 nest egg. But the real lesson is the master lever: it isn't the size of your pile in dollars, it's your withdrawal RATE — spending divided by the pile. Spend a bigger slice and the chance the money lasts falls off a cliff. The deeper idea is sequence-of-returns risk: because you're selling investments to pay the bills WHILE the market moves, the ORDER of returns matters, not just the average. A bad run in the first few years — selling into a slump — can sink a portfolio that the exact same returns in a kinder order would have carried comfortably. That's why a more volatile market lowers the success rate even at the same average return, and why the years right around retirement are the most dangerous. The simulator Monte-Carlos hundreds of futures of spending a nest egg down: the cone of surviving balances, the median path, and a success rate that drops as you raise spending or pick a riskier mix. The durable lessons: think in withdrawal rates, not dollar piles; keep the first-year rate near 4% (lower if you retire early and need the money to last 40+ years); hold a cash buffer so you never have to sell into a crash; and stay flexible — trimming spending in bad years is the cheapest insurance there is. FIRE — financial independence, retire early — is the same math with a longer horizon and a lower safe rate.

Free and interactive — no sign-up, nothing to install. Read the full lesson for the plain-language explanation.