IRA Retirement Income โ The 4% Rule
Project sustainable retirement income from your IRA using the 4% rule and expected returns.
Why This Matters for Your Finances
Why: Knowing how much income your IRA can provide helps you plan retirement withdrawals.
How: Enter balance, ages, withdrawal rate, and expected return. See annual and monthly income.
- โ4% rule typical
- โBalance at retirement
- โYears lasting
- โMonthly income
IRA Retirement Income Calculator
4% rule โข Projected balance โข Sustainable income
Sample Scenarios โ Click to Load
IRA Details
Income Analysis
Current Situation
Projections
Income
Get AI-Powered Analysis
Get retirement income optimization strategies.
โ ๏ธFor educational and informational purposes only. Verify with a qualified professional.
๐ Key Takeaways
- โข Lower withdrawal rate = longer-lasting portfolio; consider 3โ3.5% for long retirements
- โข Include Social Security in income planningโIRA is one piece
- โข Bucket strategy can provide stability; sequence of returns risk matters early
- โข 4% rule: Trinity Study (1998)โ95% success over 30 years
๐ก Did You Know?
๐ How Retirement Income Works
Project IRA balance to retirement age, then apply a withdrawal rate. 4% rule: withdraw 4% of initial balance annually, adjusted for inflation. Lower rate = more longevity; higher rate = higher risk of depletion.
Balance at Retirement
Balance = Current ร (1 + return rate)^years to grow
Annual Income
Income = Balance at retirement ร Withdrawal rate
๐ฏ Expert Tips
๐ก Lower Rate, Longer Last
3% may last 40+ years; 5% has higher depletion risk.
๐ก Add Social Security
IRA + SS + pensions = total income. Plan holistically.
๐ก Bucket Strategy
Cash (1โ2 yrs), bonds (3โ5 yrs), stocks (long-term).
๐ก Sequence Risk
Bad returns early hurt more. Consider conservative start.
โ๏ธ Withdrawal Rate Comparison
| Rate | Typical Use | Risk |
|---|---|---|
| 3% | Conservative, long retirement | Low |
| 4% | Trinity rule, 30 years | Moderate |
| 5% | Higher income, shorter horizon | Higher |
โ Frequently Asked Questions
What is the 4% rule?
Withdraw 4% of portfolio in year 1, adjust for inflation. Trinity Study showed ~95% success over 30 years.
Should I use 3% or 4%?
Depends on horizon and risk tolerance. Longer retirement or lower tolerance โ consider 3%.
Does this include Social Security?
No. Add SS to IRA income for total retirement income.
What is sequence of returns risk?
Bad returns early in retirement hurt more than later. Can deplete portfolio faster.
What is a bucket strategy?
Cash for 1โ2 years, bonds for 3โ5, stocks for long-term. Reduces need to sell in downturns.
When should I start withdrawals?
RMDs at 73. Before that, withdraw as needed. Consider Roth conversions in low-income years.
๐ Retirement Income by the Numbers
๐ Official Data Sources
โ ๏ธ Disclaimer: This calculator provides estimates. Consult a financial advisor for your situation.