The Safe Withdrawal Rate (SWR) is the maximum percentage of your retirement corpus you can withdraw in the first year with the withdrawal amount increased for inflation each subsequent year.

Instead of running fresh simulations every time, this page uses a compact formula derived from simulations across every combination of equity allocation (0–100%) and retirement horizon (10–100 years). The formula used fits the simulation results with R² = 0.996.

Source: Saraogi, Ravi, From Simulations to Simplicity: A Formula for Safe Withdrawal Rates (December 11, 2025). Available at SSRN: https://ssrn.com/abstract=5905203 or http://dx.doi.org/10.2139/ssrn.5905203

Note: A frequent source of confusion in retirement research is the interpretation of the safe withdrawal rate (SWR). Many assume that an SWR (say 3% or 4%) represents the proportion of the portfolio withdrawn each year of retirement. This is not the case. The SWR refers to only the initial withdrawal in year one, expressed as a percentage of the starting portfolio. In subsequent years, withdrawals are adjusted upward for inflation, while the corpus fluctuates with market returns. Accordingly, the withdrawal rate (annual withdrawal ÷ current portfolio value) for subsequent years will deviate from the SWR. Thus, the SWR is not the annual withdrawal rate for each year, but rather a starting point that is adjusted for inflation and market returns over time.