CAPE-based withdrawal calculator

Richer valuations support a lower starting withdrawal. This page uses one transparent rule: 1.5% plus half the CAPE earnings yield. At a CAPE of 20 that is 4%. Default CAPE is 32 (a round figure near Shiller’s as of September 2026) — type today’s print; this page does not fetch live data.

The calculator

Initial withdrawal rate3.1%1.5% + 0.5 / CAPE
First-year spending$30,625
Ending portfolio$1,630,914Horizon completed

CAPE 32.0 implies 3.1%, so $1,000,000 pays $30,625 in year one.

Success rate74%1000 seeded paths
10th percentile ending$0
Median ending$780,944
90th percentile ending$4,383,953

The formula

WR = 1.5% + ½ × (1 / CAPE). Earnings yield at CAPE 20 is 5%; half of that plus 1.5% is 4%. At CAPE 32 it is about 3.1%. After year one the dollar amount inflates like a fixed-real rule. That is the Early Retirement Now / valuation-based idea written as one equation, not a reproduction of any single paper's table.

The default of 32 is a round figure near Shiller's CAPE as of September 2026, not a live feed. Type today's reading from the Shiller CAPE table when you care about the current print.

Assumptions

One CAPE for the whole retirement. No fees, no taxes. Compare with a flat 4% and with guardrails that re-read the portfolio. The 4% rule calculator is the locked-rate sibling.

Frequently asked questions

How does a CAPE-based withdrawal rate work?
This calculator uses a published valuation rule of thumb: first-year withdrawal = 1.5% plus half the CAPE earnings yield (1 / CAPE). At a CAPE of 20 that is exactly 4%. Later years inflate that first-year dollar amount.
Is this Big ERN’s formula?
It is the same idea — richer valuations support a lower starting rate — written as a single transparent equation. Early Retirement Now’s papers use related but more elaborate mappings. Treat this as an illustration, not a forecast.
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