Mortality-Adjusted Withdrawal Rate Calculator
Explore how safe withdrawal rates have varied across 154 years of market history. See how different starting years and mortality assumptions affect retirement outcomes.
Understanding the 4% Rule
The "4% rule" is a guideline suggesting that retirees can withdraw 4% of their initial portfolio each year (adjusted for inflation) with a high probability of not running out of money over 30 years. This rule was derived from historical U.S. market data.
However, the safe withdrawal rate varies significantly depending on when you retire. Someone retiring in 1966 (before a prolonged bear market) faced very different conditions than someone retiring in 1982 (before a historic bull run).
Why Longevity Matters
The traditional 4% rule assumes a fixed 30-year retirement. But your actual planning horizon depends on your life expectancy. A healthy 65-year-old might need to plan for 35+ years, while someone with health issues might have a shorter horizon.
The "mortality-adjusted SWR" in this tool calculates the safe withdrawal rate based on your specific mortality assumptions, giving you a more personalized estimate.
Reading the State Chart
The stacked chart shows three possible states at each age:
- Alive & Solvent: You're alive and your portfolio still has money
- Alive & Insolvent: You're alive but your portfolio has run out
- Deceased: Based on mortality probability
The goal is to maximize the "alive & solvent" area and minimize the "alive & insolvent" area.
Want a personalized retirement simulation?
ActuaPlan goes beyond historical analysis. It uses Monte Carlo simulation to generate thousands of possible futures based on your specific situation, incorporating Social Security, pensions, taxes, and healthcare costs.
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