VPW calculator

Variable percentage withdrawal spends a rising share of the remaining balance as the horizon shortens. Year one of a 40-year 3.5% plan is not 3.5% — it is the remaining-horizon annuity.

The calculator

Portfolio ($)

Horizon (years)

Assumed real return (%)

Actual annual return (%)

First-year spending$46,8274.7% of the starting portfolio

Last-year spending$68,609103.5% of whatever is left

Ending portfolio$0Horizon completed

A 40-year VPW at 3.5% assumed real spends $46,827 in year one from $1,000,000.

Run 1,000 market paths

Success rate100%1000 seeded paths of this rule — last-year spend-down is not ruin

10th percentile last-year spend$13,926

Median last-year spend$44,715

90th percentile last-year spend$137,777

How VPW works

Each year the withdrawal is the amortisation of the current balance over the remaining years at the assumed real return. At a zero assumed return that is simply 1 / years remaining. At 3.5% real over 30 years it is about 5.44%. The Bogleheads VPW worksheet is the community reference; this page is that identity with a visible path.

Compare it with Guyton-Klinger (discrete rails) and Merton (same annuity idea, with the return implied by risk aversion).

Assumptions

One assumed return for the payout fraction, one actual return for the path. No fees, no taxes. VPW cannot exhaust the portfolio by construction if the last year spends whatever is left — a crash still cuts the income.

Frequently asked questions

What is variable percentage withdrawal?

VPW spends a percentage of the current portfolio that rises as the remaining horizon shortens, so the plan aims to spend the balance over a chosen number of years rather than preserve it forever.

What assumed return should I use?

Bogleheads VPW worksheets commonly use a conservative real return around 3% to 3.5% for a stock-heavy portfolio. A higher assumed return spends more now and leaves less later.

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