Sustainable Drawdown Rate Calculator
Details
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Calculating Your Sustainable Drawdown Rate
Unlike a fixed percentage rule, this calculator works backward from your desired retirement length to find the exact annual withdrawal that will fully deplete your balance by your target end date - accounting for ongoing investment returns.
Why This Differs from the 4% Rule
The traditional 4% rule assumes an indefinite (perpetual) retirement and builds in a safety margin. This calculator instead solves for a finite time horizon, which can support a higher withdrawal rate if you have a defined retirement length in mind (e.g. until age 95).
Balancing Risk and Lifestyle
A longer target duration and lower assumed return rate are more conservative (lower annual withdrawal). A shorter duration and higher assumed return allow for higher withdrawals, but with greater risk if markets underperform.
Calculation assumes a constant annual return, which does not reflect real market volatility. Not financial advice - consult a licensed financial adviser.