Determine the longevity of your retirement portfolio.
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Calculated SWR
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Portfolio Longevity
Understanding Safe Withdrawal Rates (SWR)
The Safe Withdrawal Rate (SWR) is a critical concept in retirement planning and the FIRE (Financial Independence, Retire Early) movement. It represents the percentage of your initial investment portfolio that you can withdraw annually without running out of money during your lifetime.
Historically, the "4% Rule" derived from the Trinity Study suggests that withdrawing 4% of your portfolio in the first year of retirement, and adjusting that dollar amount for inflation in subsequent years, has a very high probability of lasting 30 years.
How This Calculator Works
This calculator determines your current withdrawal rate based on your spending needs and simulates the longevity of your portfolio. The calculation logic is as follows:
SWR Calculation:(Annual Spending ÷ Total Portfolio Value) × 100.
Longevity Simulation: The calculator performs a year-by-year simulation. Every year, your portfolio grows by the "Expected Annual Return". Simultaneously, you withdraw your spending amount. The spending amount increases annually based on the "Inflation Rate" to maintain your purchasing power.
Success Metric: The calculator counts how many years the portfolio remains above $0. It caps at 60+ years, assuming that covers most retirement horizons.
Key Factors Affecting Portfolio Longevity
Your withdrawal rate is just one variable. Consider these inputs carefully:
Expected Annual Return: The stock market historically returns about 7-10% (nominal) or 5-7% (real, inflation-adjusted). However, relying on high returns can be risky. A more conservative estimate (e.g., 5-6%) provides a safety buffer.
Inflation Rate: Inflation erodes purchasing power. If your expenses rise by 3% annually, your portfolio must work harder to keep up.
Sequence of Returns Risk: This calculator assumes a constant average return. In reality, a market crash early in retirement can significantly reduce portfolio longevity, even if the average return over time is good.
Safe Withdrawal Rate Guidelines
While 4% is the standard benchmark, different goals require different rates:
3.0% – 3.5%: Extremely conservative, often recommended for early retirees (FIRE) planning for 40-60 year horizons.
3.5% – 4.0%: The standard "safe" zone for a traditional 30-year retirement.
4.0% – 5.0%: Aggressive. This may be acceptable for shorter retirement periods or if you have flexible spending capacity (ability to cut budget in bad years).
Over 5.0%: High risk of portfolio depletion unless supported by other income streams (Social Security, Pension).
function calculateSWR() {
// 1. Get input values
var portfolio = parseFloat(document.getElementById('portfolio_value').value);
var spending = parseFloat(document.getElementById('annual_spend').value);
var roi = parseFloat(document.getElementById('roi_percentage').value);
var inflation = parseFloat(document.getElementById('inflation_rate').value);
// 2. Validation
if (isNaN(portfolio) || isNaN(spending) || isNaN(roi) || isNaN(inflation)) {
alert("Please fill in all fields with valid numbers.");
return;
}
if (portfolio <= 0) {
alert("Portfolio value must be greater than zero.");
return;
}
// 3. Calculate Immediate SWR
var currentSWR = (spending / portfolio) * 100;
// 4. Calculate Longevity (Simulation)
// We simulate year by year:
// 1. Withdraw spending (Assuming start of year withdrawal for conservative estimate)
// 2. Remainder grows by ROI
// 3. Spending increases by inflation for next year
var currentBalance = portfolio;
var currentSpending = spending;
var years = 0;
var maxYears = 100; // Cap loop to prevent browser hang
var infinite = false;
// Using a standard cash flow model:
// We assume withdrawal happens, then growth happens on remainder.
while (years < maxYears) {
if (currentBalance <= 0) break;
// Withdraw first
currentBalance = currentBalance – currentSpending;
if (currentBalance portfolio) {
infinite = true;
}
// 5. Display Results
var resultArea = document.getElementById('result-area');
var resSWR = document.getElementById('res_swr');
var resYears = document.getElementById('res_years');
var resSummary = document.getElementById('res_summary');
resultArea.style.display = 'block';
resSWR.innerText = currentSWR.toFixed(2) + "%";
if (infinite) {
resYears.innerText = "Forever+";
} else if (years === maxYears) {
resYears.innerText = "60+ Years";
} else {
resYears.innerText = years + " Years";
}
// Generate Analysis Text
var analysis = "";
var badgeClass = "";
if (currentSWR <= 3.5) {
analysis = "Excellent. Your withdrawal rate is very conservative (" + currentSWR.toFixed(2) + "%). Your portfolio has a very high probability of lasting indefinitely, making this ideal for early retirement.";
} else if (currentSWR <= 4.0) {
analysis = "Good. Your withdrawal rate is within the standard safe zone (" + currentSWR.toFixed(2) + "%). According to the Trinity Study, this sustains a 30-year retirement in 95% of historical market scenarios.";
} else if (currentSWR <= 5.0) {
analysis = "Caution. Your withdrawal rate is aggressive (" + currentSWR.toFixed(2) + "%). You may face a risk of depletion if market returns are poor in the early years. Consider reducing expenses or working longer.";
} else {
analysis = "High Risk. A withdrawal rate of " + currentSWR.toFixed(2) + "% is historically unsustainable for long periods. You are likely to deplete your portfolio within " + years + " years without additional income.";
}
resSummary.innerHTML = analysis;
}