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Retirement Sustainable Withdrawal Rate Accumulation Projection

Annual retirement income desired (today's dollars)	$
Enter a number that represents total anticipated income shortfall in retirement after factoring in Social Security retirement income, pension income, and all other known sources of income.
Current assets available	$
Enter total value of current retirement savings, including 401(k) plans and IRAs.
Additional periodic contributions	$
Enter amount, if any, of estimated future periodic contributions to retirement savings.
Contribution frequency
Accumulation period (1-40 years)
Enter number of years until retirement. If you enter 30, for example, retirement takes place in year 31.
Inflation rate
Adjust periodic contributions for inflation?
Rate of retirement withdrawal as a percentage of initial portfolio value
Select withdrawal percentage for comparison purposes. For example, if you enter 4%, the calculator will compare desired income to retirement savings withdrawals based on portfolio withdrawals equal to 4% of portfolio value in first year of retirement.
Effective tax rate during withdrawal period
Rate of return

This calculator compares:

(1) Desired annual income in retirement (adjusted for inflation), to

(2) The amount of annual income that might be generated based on projected retirement resources and a given intial portfolio withdrawal percentage.

This calculator assumes that all taxes due on retirement investment portfolio prior to retirement are paid with outside funds. The calculator assumes that all distributions made in retirement are fully taxable at the specified tax rate.

This is a hypothetical example and is not intended to reflect the actual performance of any specific investment, nor is it an estimate or guarantee of future value. Investment fees and expenses have not been deducted. If they had been, the results would have been lower. When making an investment decision, investors should consider their personal investment horizons and income tax brackets, both current and anticipated, as these may further impact the results of this comparison.

This illustration assumes a fixed annual rate of return; the rate of return on your actual investment portfolio will be different and will vary over time, according to actual market performance. This is particularly true for long-term investments. It is important to note that investments offering the potential for higher rates of return also involve a higher degree of risk to principal.

Retirement Sustainable Withdrawal Rate Accumulation Projection Chart

Annual retirement income of $60,000 in today's dollars would, after adjusting for inflation, equate to $125,627 desired income in your first year of retirement. Accounting for taxes due in retirement, this would mean that your retirement savings would have to provide for an initial distribution of $157,033.

Based on your current assets and expected contributions, a 4% initial portfolio withdrawal in your first year of retirement would result in a gross distribution of $121,990. After taxes, you would have $97,592.

Based on your current assets and expected contributions, your retirement savings could grow to $3,049,759 by the time you reach retirement.

In order to receive a 4% initial portfolio withdrawal equal to $157,033, you would need to have accumulated $3,925,834 in retirement savings by the time you reach retirement. That would require additional current assets in the amount of $204,124, or approximately $15,968 in additional annual contributions.

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Assumptions

This calculator assumes that all taxes due on retirement investment portfolio prior to retirement are paid with outside funds. The calculator assumes that all distributions made in retirement are fully taxable at the specified tax rate.
This is a hypothetical example and is not intended to reflect the actual performance of any specific investment, nor is it an estimate or guarantee of future value. Investment fees and expenses have not been deducted. If they had been, the results would have been lower. When making an investment decision, investors should consider their personal investment horizons and income tax brackets, both current and anticipated, as these may further impact the results of this comparison.
This illustration assumes a fixed annual rate of return; the rate of return on your actual investment portfolio will be different and will vary over time, according to actual market performance. This is particularly true for long-term investments. It is important to note that investments offering the potential for higher rates of return also involve a higher degree of risk to principal.