Safe withdrawal rate calculator

A safe withdrawal rate (SWR) is the percentage of your retirement portfolio you can take out in the first year — then adjust for inflation every year after — with a high chance the money lasts your whole retirement. The classic benchmark is the 4% rule: withdraw 4% of your starting balance, so $40,000 from $1,000,000, and increase that dollar figure with inflation. This calculator shows the rate your own assumptions can sustain and how long your savings last at the rate you choose.

The 4% rule comes from U.S. research (the "Bengen" and "Trinity" studies) showing a 4% inflation-adjusted withdrawal survived every historical 30-year period. It's widely used in Canada as a starting point, but many Canadian planners lean toward 3.5% because of longer lifespans, lower expected returns, and investment fees. The rule is a rule of thumb, not a guarantee — read our does the 4% rule work in Canada? guide for the full picture.

It depends on three things: how much you withdraw, what your portfolio earns, and how fast inflation pushes up your spending. Withdraw less than your portfolio earns (after inflation) and it can last indefinitely; withdraw more and you steadily draw down principal until it runs out. Enter your numbers above and the calculator runs a year-by-year drawdown to show exactly when the balance would hit zero.

Because this tool assumes a smooth, constant return every year. In the real world, returns are volatile, and a market crash in your first few years of retirement does outsized damage — that's sequence-of-returns risk. The 4% rule deliberately builds in a safety margin to survive the worst historical sequences, which is why it's lower than the rate a constant-return calculation suggests. Treat the sustainable rate here as an optimistic upper bound and give yourself a cushion below it.

Yes — that's how the safe-withdrawal-rate research is defined. You set a first-year dollar amount, then increase it each year by inflation so your purchasing power stays constant. This calculator does exactly that: the year-by-year table shows the withdrawal growing while the balance is drawn down. Holding withdrawals flat in nominal terms would let you take more early on, but your real spending power would shrink every year.

No. This tool looks only at your portfolio and the income it can sustain. CPP and OAS are separate inflation-indexed lifetime income that reduce how much your portfolio must provide — factor them in with the how much do I need to retire calculator. Withdrawals from RRSPs and RRIFs are also taxable, so enter an after-tax spending figure or budget for the tax bill separately.

For a balanced portfolio, a long-run nominal return of 5–6% and inflation around 2–2.5% are common, reasonably conservative assumptions — roughly a 3% real return. More stocks raise the expected return but also the volatility (and sequence risk). Lower your return assumption to stress-test the plan, and remember that fees come straight off the top, so use a net-of-fee figure.

Lower is safer, but not always better. Withdrawing very little protects against running out, yet it can mean dying with a large unspent portfolio and a lower standard of living than you could have afforded. The goal is balance: enough cushion to weather bad markets, but not so much restraint that you under-live your retirement. Many retirees use a flexible approach — trimming spending in down years rather than fixing one rate forever.

No. It's an educational estimate using a constant-return drawdown model. Real retirement income planning has to account for market volatility and sequence risk, taxes, CPP/OAS, healthcare, longevity, and spending that changes through retirement. Use this as a starting point and consider a fee-only advisor before locking in a withdrawal strategy.