Investment Monthly Income Calculator

Research from the Trinity Study (1998) and William Bengen's original 1994 paper showed that withdrawing 4% of a balanced 60/40 portfolio in year one, then adjusting for inflation, historically lasted 30 years in 95% of scenarios.

• Use 3.5% for longer retirements (35-40 years) or for investors who prefer a buffer.
• Raising the equity allocation above 75% increases volatility with limited benefit to success probability.
• Dynamic guardrails (e.g., Guyton-Klinger) can deliver higher lifetime income by cutting withdrawals after severe market drops.

Sources: Cooley, Hubbard & Walz, “Retirement Savings: Choosing a Withdrawal Rate” (Trinity University, 1998); Bengen, “Determining Withdrawal Rates Using Historical Data” (Journal of Financial Planning, 1994).

Early losses hurt the most because withdrawals lock in declines before portfolios recover. Two retirees with identical average returns can experience very different outcomes depending on the first five years.

• Hold 2-3 years of expenses in cash or short-term bonds to ride out down markets.
• Temporarily trim withdrawals after a 20%+ decline to protect principal.
• Diversify globally and include quality bonds to smooth the ride.

Source: Wade Pfau, "An International Perspective on Safe Withdrawal Rates" (Journal of Financial Planning, 2010); Morningstar, "The State of Retirement Income" (2021).

Organize savings by time horizon: Bucket 1 cash for 0-2 years of withdrawals, Bucket 2 conservative bonds for the next decade, Bucket 3 growth assets for year 10+ needs.

Refill the near-term buckets with portfolio gains during strong markets. When markets fall, spend from cash first to avoid selling stocks at a loss.

Source: Vanguard Research, "From Assets to Income: A Goals-based Approach to Retirement Spending" (2020).

A common sequence is taxable assets first (harvest long-term capital gains and qualified dividends), then tax-deferred accounts (traditional IRA/401(k)), and Roth accounts last for tax-free compounding.

• Satisfy RMDs (IRS Publication 590-B) every year after age 73 to avoid penalties.
• Bridge early retirement with capital gains in the 0% tax bracket when possible.
• Shift withdrawals in response to tax bracket changes, Medicare IRMAA thresholds, or pending Roth conversions.

Sources: IRS Publication 590-B (2024); Vanguard, "Tax-efficient Retirement Withdrawal Sequencing" (2022).

Delaying Social Security boosts guaranteed income by roughly 8% per year between full retirement age and 70. Use portfolio withdrawals or part-time work to bridge the gap.

Claiming later provides a larger inflation-adjusted benefit and reduces pressure on portfolio withdrawals later in life.

Sources: Social Security Administration, "Retirement Benefits" (SSA Publication No. 05-10035); Boston College Center for Retirement Research, "How to Maximize Social Security" (2022).

Inflation erodes purchasing power—prices have doubled roughly every 24 years at a 3% CPI average since 1926. Build annual raises into your withdrawal plan or ladder Treasury Inflation-Protected Securities (TIPS).

Source: Bureau of Labor Statistics, Consumer Price Index Summary (1913-2024); Federal Reserve Bank of St. Louis FRED database.

Monte Carlo simulations layer thousands of random market paths to estimate the probability that your income plan succeeds. If success rates fall below 80%, reduce withdrawals or shift more into growth assets.

Consider dynamic guardrails: increase withdrawals when portfolio growth exceeds plan targets and trim them if balances fall beyond a preset band.

Source: Morningstar, "Safe Withdrawal Rates for Retirees in 2023"; Vanguard Capital Markets Model (VCMM) methodology documentation (2023).