Sensible Withdrawals Calculator
A low base percentage every year, plus a slice of any real gains the portfolio has made above its starting value.
Part of the FIRE simulator, a historical backtest calculator that replays your plan across every rolling window of market history since 1871.
How the Sensible Withdrawals strategy works
Sensible Withdrawals pairs a conservative base withdrawal (a small percentage of the current portfolio) with an "extras" cut of the real gains the portfolio has made above its inflation-adjusted starting value. In flat and down years the base is the whole income; in good years the extras cut adds a share of those gains on top.
What the Sensible Withdrawals strategy trades off
A low base withdrawal protects the inflation-adjusted principal, and a slice of the real gains above it pays out when markets do well. The base alone is lean in flat years, and the bonus half of the income cannot be budgeted a year ahead.
Pros and cons
Pros
- Protects the inflation-adjusted principal
- Shares in market gains without over-committing
- Conservative base keeps the plan resilient
Cons
- The base alone may feel lean in flat markets
- Bonus income is unpredictable
- Two rates to configure
Parameters you can adjust
- Base withdrawal rate: The share of the portfolio always withdrawn, even in flat or down years.
- Bonus rate on real gains: The share of real gains above the inflation-adjusted starting amount, taken as extra spending in good years.
Backtest Sensible Withdrawals against market history
Opens the simulator with Sensible Withdrawals already selected, so you only set your portfolio and horizon.