Retirement Income (Withdrawal) Calculator
Planning how much income you can realistically withdraw in retirement is just as important as planning how much you save. Our Retirement Income (Withdrawal) Calculator helps you estimate the monthly income you can expect to generate from your 401(k) or other retirement savings during your retirement years.
Retirement Income (Withdrawal)
Estimate a steady monthly income from your 401(k) using an annuity-style model. Just enter your projected retirement savings balance, expected annual return, years you expect to draw income, and inflation rate — and you’ll get a clear estimate of how much you could withdraw each month.
Estimated Monthly Income
This is a simplified estimate and ignores tax effects. Consider consulting a fiduciary advisor.
Why this matters:
Retirement is the phase when you stop contributing and start withdrawing. How you draw down your savings — your withdrawal rate — determines whether your portfolio lasts the rest of your life. With rising life expectancies, market volatility, and inflation, it’s easy to over-estimate what your savings can provide. This calculator gives you a practical view of income in the decumulation phase.
How to Use This Calculator
- Retirement Balance: Enter the total amount you expect to have saved in your 401(k) or retirement accounts at the start of retirement (for example, $800,000).
Years in Retirement: Estimate how many years you will withdraw income (for example, 30 years).
Expected Annual Return (%): Enter a conservative estimate of return after retirement (e.g., 3%-5%).
Annual Inflation Rate (%): Inflation reduces your purchasing power. Enter a realistic rate (e.g., 2%-3%).
Withdrawal Frequency: Choose whether you wish to receive income monthly, quarterly or annually.
Click Calculate and the tool will show your monthly (or chosen interval) income you could draw from your savings given those assumptions.
Why Monthly Income from Your 401(k) Matters
When you retire, you transition from accumulation to drawdown — moving from building your nest egg to using it. The drawdown strategy involves choosing a withdrawal rate that balances income today with preserving savings for tomorrow. Tools and research suggest common guidelines like the 4% rule — withdrawing 4% of your savings in the first year of retirement, then adjusting for inflation — to help your portfolio last about 30 years. Schwab Brokerage+2SmartAsset+2
However, many retirees find they either withdraw too aggressively and run out of money, or too conservatively and underspend their lifestyle. This calculator helps you test scenarios and plan accordingly.
Example Scenarios
Here are two example scenarios to illustrate:
|
Scenario
|
Retirement Balance
|
Expected Return
|
Years in Retirement
|
Estimated Annual Income
|
Estimated Monthly Income
|
|---|---|---|---|---|---|
|
Example A
|
$800,000
|
4%
|
30 years
|
$38,000
|
$3,167
|
|
Example B
|
$1,200,000
|
5%
|
25 years
|
$66,000
|
$5,500
|
These estimates assume you maintain the savings intact and adjust withdrawals each year for inflation. Your actual monthly income could vary based on market returns, inflation, taxes, and personal spending habits.
Key Factors That Affect Your Withdrawal Income
- Withdrawal Rate: A higher rate means higher income today but greater risk of depleting the portfolio early. The retirement drawdown strategy balances current income and portfolio longevity.
- Expected Annual Return: After retirement, your portfolio typically shifts to more conservative investments, which can lower returns but also reduce risk.
- Inflation: If your income doesn’t keep pace with inflation, your purchasing power declines over time.
- Life Expectancy: The longer you live, the more years your savings must support.
- Fees & Taxes: High investment fees or inefficient tax withdrawals reduce net income.
Required Minimum Distributions (RMDs): Once you reach certain ages, you must withdraw minimum amounts from tax-deferred accounts, which may affect your withdrawal strategy.
Limitations & Assumptions
This calculator is designed to provide estimates and does not guarantee results. Here are some assumptions and limitations to keep in mind:
- It assumes a steady annual return and inflation rate over the withdrawal period — market returns and inflation fluctuate.
- It does not account for unexpected large expenses, changes in spending, or health care costs.
- Taxes on withdrawals, state taxes, and investment fees may reduce actual income.
- If your portfolio suffers a major loss early in retirement (“sequence of returns risk”), your withdrawals may need to be adjusted.
- It’s not a substitute for personalized financial advice.
Guides & Learning
Short, Helpful explainer that keep users on-page longer.
All 401k Calculator in One Place
Employee Match: Dont Leave Money Behind
401(k) vs IRA: Which Fits you
FAQs – 401(k) Calculator & Retirement Planning
A common guideline is the 4% rule — withdrawing 4% of your initial portfolio value in the first year, then inflation-adjusted each year. However, this rule may not fit everyone’s situation.
It depends on your balance, assumed return, inflation, years of withdrawal. This calculator helps estimate based on your values.
No — it estimates income solely based on savings and withdrawal assumptions. You may want to add other income sources manually.
Yes, many plans allow periodic withdrawals in retirement, but rules vary. Consult your plan’s terms.
Lower returns reduce income or shorten portfolio longevity. Consider adjusting withdrawal rate or spending to adapt.
Once you reach age 73 (for many traditional retirement accounts), you must withdraw a minimum each year. Failing to do so can incur severe IRS penalties.
