How much can you spend when retired?

Method Safe Percent
Life+6
FlexBequest
Start-COLA
Predicted Inflation
Adjust-2017
Remarks

How this calculator works

This calculator estimates the percentage you can safely spend, this year, from your retirement, investment, and bank accounts. Be aware that if the money is in a non-Roth retirement account, some of the spending must go to taxes on the amounts withdrawn. Income from all sources, including Social Security, a pension or annuity, plus the amount calculated here, will have to cover your income taxes plus the rest of your budget.

A safe payout depends on how your money is invested and on your life expectancy. Because these factors change over time, you should revisit this calculator every year.
  • You can have your life expectancy estimated from data for males or females, or from an average of the two.
  • Enter the portions you have invested in stocks (U.S. and international) and in cash, over all your spending accounts. Don't include reserve funds, annuity payments, Social Security, health savings accounts, or pensions. Do include all IRA, 401(k), 403(b), 457, and taxable accounts, plus bank deposits, that you use to pay your expenses.
  • Reflecting on your goals, indicate whether your first priority is how much you can spend, the stability of your budget, or the amount to be left as an inheritance.
The calculator generates three options for you to consider. They all aim to protect your savings from being depleted.
  • Life+6 is based on how many years you may live, according to life expectancy tables. The goal is to maximize what you can spend, while equaling or bettering inflation. In doing so, this method preserves a cushion for living longer than expected and may leave a modest bequest.
  • FlexBequest uses a formula developed by economists, with proprietary settings based on our research. This method spends a fairly consistent percentage, adjusted for your age and stock-exposure so as to maximize the inheritance you leave. The payouts may not keep up with inflation in some years but will tend to do so, long-term.
  • Start-COLA calculates how much to spend this year if it is the first year you will use a "collared inflation" method. The goal is to keep your spending in line with inflation, for a stable standard of living. Each year in the future, your spending budget gets a cost-of-living adjustment (COLA). This method may or may not preserve a bequest.
If you are using a COLA strategy, Adjust-2017 shows how to change your 2017 spending to match expected inflation. Increment your 2016 spending (in dollars) by the percent shown in the table. A collar limits the COLA to a maximum of 6.7% which, historically, has kept accounts from being depleted.
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Answer each question in the left panel. Then click the Calculate button. If you change your answers, click the button again. Read Basic Portfolios or use our Best-Invest calculator to decide how to allocate your money to stocks, bonds, and savings. To learn more about retirement income, read our article on safe payouts.

​Your tax obligations will affect the amount you can spend; consult your tax adviser for specifics. The future may depart from historical trends that were used to generate these estimates, and market changes could cause your results to differ, up or down. You could lose money. Even low-risk investments like T-Bills, bank savings, and money market funds can lose buying power when interest rates are very low or inflation runs higher than expected.

For more information on how to apply the recommendations made by our calculators ...
Note: This calculator was most recently updated on January 8, 2017 with current data on inflation.