1. What is the Retirement Income Calculation?

The retirement income calculation estimates how much money you can sustainably withdraw from your retirement savings each year without running out of funds. It's based on your total balance and a safe withdrawal rate.

2. How Does the Calculator Work?

The calculator uses the simple equation:

Where:

• \( Balance \) — Total retirement savings in USD
• \( Withdrawal\ Rate \) — Annual withdrawal percentage as decimal (e.g., 0.04 for 4%)

Explanation: This calculation provides a baseline estimate of sustainable retirement income based on common financial planning principles.

3. Importance of Withdrawal Rate

Details: The 4% rule is a common benchmark, suggesting that withdrawing 4% annually from a balanced portfolio has historically provided income that lasts 30+ years. However, individual circumstances may vary.

4. Using the Calculator

Tips: Enter your total retirement balance in USD and your planned withdrawal rate as a decimal (e.g., 0.04 for 4%). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a safe withdrawal rate?
A: While 4% is traditional, some advisors now recommend 3-3.5% for longer retirements or more conservative portfolios.

Q2: Does this account for inflation?
A: No, this is nominal income. You would typically increase withdrawals annually by inflation.

Q3: Should I include Social Security?
A: This calculator focuses on portfolio withdrawals. Social Security would be additional income.

Q4: What about taxes?
A: This shows pre-tax income. Actual spendable income may be less after taxes.

Q5: Is this guaranteed?
A: No, this is an estimate. Market performance will affect actual portfolio longevity.