4% Withdrawal Rate on $1,000,000 Portfolio
A 4% withdrawal rate on a $1,000,000 retirement portfolio yields $40,000 per year or $3,333 per month.
How to use this tool
- Enter the value of your retirement portfolio at the start of retirement.
- Choose a withdrawal rate (4% is standard; lower is safer for long retirements).
- Read your annual and monthly withdrawal amounts.
- Check the 'years at 0% growth' figure as a conservative floor.
The classic 4% rule applied to a $1,000,000 portfolio generates $40,000 in annual retirement income.
Frequently asked questions
- What is the 4% rule?
- The 4% rule says you can withdraw 4% of your initial retirement portfolio in the first year, then adjust that dollar amount for inflation each year, with a high chance the money lasts 30+ years.
- Is 4% still safe today?
- It remains a reasonable planning baseline, but some researchers suggest 3–3.5% for early retirees or periods of high valuations. Flexible spending and other income sources can support a higher rate.
- Why does the calculator show 'years at 0% growth'?
- It's a worst-case floor showing how long the pot lasts if it earns nothing. In reality positive returns are expected to extend it well beyond this number — that is the whole basis of the 4% rule.
- Should I withdraw monthly or annually?
- Either works. Many retirees set up automatic monthly transfers for budgeting; the monthly figure here is simply the annual amount divided by 12.