Retirement
Safe withdrawal
Applies the withdrawal rule to convert the pot into income.
The Formula
Annual income = nest egg x withdrawal rate
Applies the withdrawal rule to convert the pot into income.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| w | Withdrawal rate | percent | Share withdrawn in the first year, commonly 4%. |
What Each Symbol Means
wpercent
Withdrawal rate
Share withdrawn in the first year, commonly 4%.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate retirement savings page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Retirement Savings, filed under Finance. Every number the guide produces comes from substituting into this one line.