Let's say your budget requires (the currently set value) per month after tax spending in today's dollars.
We turn that into an annual amount.
Annual Net Income = × 12 =
We "gross up" for taxes.
To end up with in your pocket, we divide by (1 − your effective tax rate of %):
Required Withdrawal (pre-tax) = ÷ (1 − %) =
Finally, we need to inflation-adjust each year until retirement.
That pre-tax amount today becomes at age , based on your inflation assumption.
How "Income → Spending" Works
You pick your target gross withdrawal.
Let's say you want withdraw per month (/year) before taxes from your portfolio.
We inflation-adjust to retirement.
That pre-tax amount today becomes at age .
We "net down" for taxes.
We run that through the Tax Estimator, which subtracts your estimated taxes () based on your filing status and deductions:
Net Income = − =
We turn that into monthly spending.
Your available after-tax monthly spending is:
Monthly Spending = ÷ 12 =
How the "4% Rule" is Calculated
We start with your portfolio's estimated value at retirement.
Based on your inputs (current investments, contributions, and expected returns), we project your portfolio will be worth at age .
Then, we apply your chosen withdrawal rate.
Your first-year withdrawal is that value multiplied by your selected rate of %:
× % =
"Equivalent in Today's Dollars" is for perspective.
This number shows what your first-year withdrawal would be if you applied the same withdrawal rate to your current portfolio of . It helps you understand the withdrawal amount in today's terms, before any future growth or inflation.
× % =
Want to see exactly how we arrive at your tax rates and deductions? Just hop over to the Tax Estimator tab for a full breakdown.
Note: This simplified estimator does not account for state taxes, credits, or advanced deductions. It uses U.S.2025 estimated brackets and standard deductions, including an additional amount for age 65+. Actual results may vary.
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