Annual spending
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SWR Spending (Asset-based)
Monthly spending
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Purpose and When to Use
- Use this when you already know your portfolio size and want a rough yearly spending estimate.
- Use this to compare conservative versus aggressive withdrawal assumptions.
Inputs Explained
- Portfolio value: Investable assets available for withdrawals. Typical range: 100,000 to 5,000,000.
- SWR: Safe Withdrawal Rate percentage used for annual spending estimate. Typical range: 3% to 4.5%.
Assumptions and Limitations
- Annual spending formula: portfolio value x (SWR / 100).
- Monthly spending is annual spending divided by 12 for a simple estimate.
- Taxes, portfolio fees, inflation, and variable withdrawals are not modeled.
- Market drawdowns can materially change sustainable spending in real life.
Worked Example
Example: Portfolio value 1,000,000 and SWR 4%.
Result: Estimated annual spending 40,000, monthly spending about 3,333.
FAQ
Can I spend this exact amount every year?
Not necessarily. Spending often needs adjustment based on returns and inflation.
Should cash emergency funds be included?
Usually no. This tool is better for long-term invested assets.
What SWR should beginners use?
Many beginners compare 3.5%, 4.0%, and 4.5% to see a conservative-to-optimistic range.
Related Reading
Author: SimpleReturns Team
Last updated: 2026-02-22