Roth IRA Drawdown Calculator
Test a percentage based withdrawal rate, such as the 4% rule, against your Roth IRA and see whether the portfolio survives your full retirement.
Drawdown Setup
Model your withdrawal strategy
Calculating...
How the Drawdown Test Works
Your withdrawal rate sets only the first year’s income: portfolio value times the rate. After that, the dollar amount rises with inflation each year, regardless of market performance.
Each year the withdrawal comes out first and the remaining balance earns your portfolio return. If the balance reaches zero, the calculator reports the year it was depleted.
Enter your portfolio
Use the Roth IRA balance you plan to draw from in retirement.
Pick a withdrawal rate
Common tests are 3% to 5%. The calculator converts it into a first year dollar amount.
Set return, inflation, and length
A realistic retirement return and inflation rate matter as much as the withdrawal rate itself.
Read the verdict
You will see whether the portfolio survives, the year one withdrawal, and any ending balance.
What Is the Formula?
This is the classic inflation adjusted withdrawal method behind the 4% rule, applied with a steady average return.
- P : Portfolio
- Your Roth IRA balance at the start of retirement.
- w : Withdrawal rate
- The share of the starting balance taken in year one.
- π : Inflation
- How much each year’s withdrawal increases to keep pace with prices.
- r : Portfolio return
- The average yearly return earned during retirement.
The last line shows the highest rate that can last forever. At a 5% return and 2.5% inflation, that is (0.05 minus 0.025) ÷ 1.05, or about 2.4%. Higher rates work only for a limited number of years.
How Many Years a Portfolio Lasts by Withdrawal Rate
Find your withdrawal rate on the left and your expected return across the top. Values assume 2.5% inflation and apply to any portfolio size.
| Withdrawal rate | 3% return | 5% return | 7% return |
|---|---|---|---|
| 3% | 37 years | 50+ years | 50+ years |
| 4% | 27 years | 38 years | 50+ years |
| 5% | 21 years | 27 years | 43 years |
| 6% | 18 years | 21 years | 29 years |
| 7% | 15 years | 18 years | 22 years |
Steady returns only; poor returns early in retirement can shorten these figures.
Example: Testing the 4% Rule on $800,000
Here is the default scenario, a 4% withdrawal rate on an $800,000 Roth IRA over a 30 year retirement.
- 1Year one withdrawal: $800,000 × 4% = $32,000.
- 2Year two: $32,000 × 1.025 = $32,800, and it keeps rising 2.5% a year.
- 3Over 30 years, withdrawals total $1,404,887, all tax free from a Roth IRA.
FAQs
It means withdrawing 4% of your starting balance in year one, then raising that dollar amount with inflation each year.
At a 5% return and 2.5% inflation it lasts about 38 years here, but lower returns can shorten that sharply.
Roth withdrawals are tax free, so you don’t need to take extra to cover income tax on every dollar you spend.
No, it uses a steady average return, so a market drop early in retirement could deplete the balance sooner.
The result switches to Portfolio Depleted and shows the year the money runs out, so lower the rate until it survives.
No, the rate sets only the first year amount, which then grows with inflation regardless of market value.
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