Safe withdrawal rate calculator — how long the portfolio lasts

The simulation runs month by month for up to fifty years. The balance grows at the monthly root of the annual return, the withdrawal is taken, and if inflation indexing is on the withdrawal itself is grown at the monthly root of the inflation rate, so it compounds against a balance that is shrinking. Using the geometric root rather than dividing the annual rate by twelve is deliberate: the arithmetic shortcut overstates growth by three to four percent over thirty years, which is enough to move a depletion date by months. The perpetual line marks the withdrawal that exactly equals the return, where the balance never falls.

One fixed return every single month is the largest simplification here, and it is the one that matters most, because it removes sequence risk entirely — the risk that a bad first decade forces you to sell into a fall. A deterministic curve is therefore the optimistic case, not the central one. No tax and no fund cost are applied, both of which shorten the curve, and the withdrawal is fixed rather than responsive to how the portfolio is doing.

Why does a deterministic curve understate the risk?

Because the danger in decumulation is not the average return, it is the order. Withdrawing a fixed amount from a portfolio that has just fallen sells more units than the same amount would have sold before the fall, and those units are permanently gone from the recovery. A fixed monthly return cannot produce that, so this curve always looks smoother than a real retirement. The sequence of returns page shows the same portfolio with the order changed and nothing else.

What is the perpetual withdrawal figure?

It is the monthly amount equal to one twelfth of the portfolio times the annual return, which is the point where withdrawals exactly consume the growth and the balance stays flat forever. It is a useful reference rather than a target, because it is only perpetual under the assumption this page makes — a constant return. In a real sequence, withdrawing all of the growth in good years leaves nothing to absorb the bad ones.

Should I index the withdrawal to inflation?

If you want the answer to mean anything about a standard of living, yes. An unindexed withdrawal keeps the same number of euros for decades while those euros buy steadily less, so the curve lasts longer by quietly shrinking your spending. Turning indexing on is what makes the 4% rule comparison a fair one, because the rule is defined with an inflation-adjusted withdrawal.

• Sequence of returns risk — the same returns in a different order
• Retirement phase planner — the gap before AOW starts
• Pension gap calculator — what AOW and your work pension leave over