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Safe withdrawal calculator: what your savings can pay each year
Work out your withdrawal rate from your savings, spending and guaranteed income, see what common rates imply, and learn why one fixed rate is only a start.
Education, not advice. This page explains general rules with invented examples. It isn't financial, tax or legal advice for your situation. Tax figures are for 2026 and come from published IRS, SSA and CMS sources. Rules change, so check current figures before you act.
Your withdrawal rate is the share of your savings you take out each year to live on. It's the single number most retirement rules of thumb are built on. This page shows how to work out your own rate, what different rates mean in dollars, and why a single fixed rate is only a starting point.
The formula
- Add up what you'll spend in a year, including income taxes on your withdrawals.
- Subtract your guaranteed income: Social Security, pensions and annuity payments.
- The difference is what your savings must provide.
- Divide it by your total savings. That's your withdrawal rate.
To go the other way, multiply your savings by a rate to see what it would pay in the first year. Many approaches then raise that amount with inflation each year.
A worked example
Tom and Rosa are 66 and newly retired, with $1,200,000 in savings. They expect to spend $90,000 a year. Their Social Security will pay $48,000 a year combined. They estimate $4,000 a year of income tax on their withdrawals.
| Step | Amount |
|---|---|
| Yearly spending | $90,000 |
| Tax on withdrawals (their estimate) | $4,000 |
| Guaranteed income | −$48,000 |
| Needed from savings | $46,000 |
| Savings | $1,200,000 |
| Withdrawal rate | 3.8% |
What different rates would pay
| Withdrawal rate | First-year amount from $1,200,000 | Monthly |
|---|---|---|
| 3% | $36,000 | $3,000 |
| 3.5% | $42,000 | $3,500 |
| 4% | $48,000 | $4,000 |
| 4.5% | $54,000 | $4,500 |
| 5% | $60,000 | $5,000 |
A widely quoted starting point is about 4% for a 30-year retirement, adjusted for inflation each year. It came from testing past markets with a fixed spending rule. See the 4% rule and its limits.
What a simple calculation leaves out
A withdrawal rate is a snapshot. It leaves out things that matter a great deal:
- How long you need the money. A retirement at 55 needs a lower rate than one at 70.
- The order of returns. Poor markets in the first years of retirement do more damage than the same returns later. See sequence-of-returns risk.
- Income that starts later. If Social Security starts at 70, you'll withdraw more before then and less after.
- Changing spending. Most people spend less in their 80s, apart from health care.
- Taxes by account. A dollar from a traditional IRA costs more than a dollar from a Roth.
- Flexibility. Being willing to trim spending after a bad year lets you start with more.
The app turns your whole plan into a monthly safe-to-spend range, using your actual balances, income, taxes and timing. It tests that spending across many simulated markets. The Guardrails screen shows the balances at which you'd adjust spending, and how likely a cut is. See how safe-to-spend is calculated.
Frequently asked questions
Should I count my home in my savings?
Usually not, unless you plan to sell it or downsize. Most people count only savings they can draw on for living costs.
Is a lower withdrawal rate always safer?
It leaves more cushion, but it also means spending less than you could. Spending flexibility can protect you without starting so low.