Worked example
Example with the default numbers — change them above.
Retirement corpus: ₹2,00,00,000 · Money must last: 40 yrs · Assumed return per year: 9% · Inflation per year: 6%
At 9% returns and 6% inflation, the highest first-year withdrawal that lasts 40 years with steady returns is 4.26% (₹70,934 a month from ₹2 Cr); a 4% start lasts 45 yrs.
| Highest rate that lasts 40 yrs | 4.26% · ₹70,934 a month from ₹2 Cr in year one |
|---|---|
| A 4% start lasts (steady returns) | 45 yrs · Survives your 40 yrs with steady returns |
| Real return | 2.83% · Return after inflation: what really funds rising withdrawals |
| Monthly income at 3.5% | ₹58,333 · Lasts 60+ yrs |
How the Safe Withdrawal Rate Calculator works
- Each rate is turned into a first-year monthly withdrawal from your corpus.
- The withdrawal is taken at the start of each month and raised by inflation every 12 months.
- The rest of the corpus grows at your expected return, minus any tax-and-costs drag.
- The table records how many years each rate pays in full, up to 60 years.
- The highest safe rate is found by searching for the largest withdrawal that still lasts your chosen number of years.
Inflation-linked withdrawals
First-year monthly withdrawal W = Corpus × rate ÷ 12
Withdrawal in year k = W × (1 + i)^(k − 1)
Each month: Balance = (Balance − withdrawal) × (1 + m)
i = inflation; m = monthly equivalent of the yearly return
Real return = (1 + return) ÷ (1 + inflation) − 1Assumptions and limits
- Returns are the same every year. That makes every rate look safer than it is, so the 'highest rate' is an upper bound; real markets add sequence-of-returns risk. The 4% rule itself (Bengen, 1994; the Trinity study, 1998) came from the worst historical US starting year, which steady returns cannot reproduce.
- Return and inflation are nominal yearly rates; withdrawals are taken at the start of each month and raised every 12 months.
- Withdrawals always rise with inflation, with no cutting back in bad years.
- The safe rate leaves exactly zero at the end of your horizon: no buffer, no inheritance.
- Tax and costs are ignored unless you enter a drag.
- This is a planning estimate, not advice on how much you should spend.
Frequently asked questions
What does a safe withdrawal rate calculator show?
It shows how long a corpus lasts if you withdraw a set percentage in the first year and raise the amount with inflation every year after. Comparing several rates side by side, over different retirement lengths, shows which rates survive and which run out, and the highest rate that lasts as long as you need, at the return and inflation you expect.
Is the 4% rule safe in India?
Often not, for early retirement. The 4% rule came from US studies of 30-year retirements and was the rate that survived the worst US starting year. Someone retiring at 40 may need 50 years of income, and what matters is the return after inflation, not inflation alone. Some Indian FIRE writers use 3% to 3.5%. With steady returns, 4% can look fine in this table, so test it in the Monte Carlo simulator too.
Why is the safe rate here higher than 3.5%?
Because this table assumes the same return every year. In reality returns jump around, and a crash in the first few years of retirement does lasting damage, since you sell investments at low prices to fund spending. The Monte Carlo simulator models those swings and usually gives a lower rate for 90% confidence. Treat this page's rate as an upper bound.
How do returns and inflation change the safe withdrawal rate?
What matters most is the real return: your return after inflation. A 9% return with 6% inflation is a real return of under 3%, and that, plus the length of retirement, sets how much you can withdraw. Raising returns or lowering inflation by one point has a similar effect. The real return is shown as one of the result figures.
Should I withdraw the same percentage every year?
The usual rule applies the percentage only in year one, then raises the rupee amount with inflation regardless of markets. Some retirees instead withdraw a fixed percentage of the current balance, or use guardrails that trim spending after bad years. Those approaches can support a higher starting rate, but your income moves up and down. This calculator models the classic version.
How many years should my withdrawals last?
Plan from your retirement age to well beyond average life expectancy. Retiring at 60, 30 years to age 90 is a common choice. Retiring at 40 or 45, plan for 45 to 50 years. The longer the horizon, the lower the safe rate, though beyond about 50 years the rate falls only slowly, towards your real return (about 2.8% at a 9% return and 6% inflation).
Sources
- Ministry of Statistics and Programme Implementation: consumer price index (inflation) data
- Reserve Bank of India: inflation, interest-rate and household-finance statistics
- AMFI: mutual fund data and investor education (SIP and SWP basics)
- SEBI: investor education on market risk
Logic and rates last verified on .
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