Variable Percentage Withdrawal (VPW) Calculator
VPW spreads the current portfolio across the remaining years at an assumed return, so the withdrawal rate climbs as the horizon shortens.
Part of the FIRE simulator, a historical backtest calculator that replays your plan across every rolling window of market history since 1871.
How the Variable Percentage Withdrawal (VPW) strategy works
VPW (the Bogleheads Variable Percentage Withdrawal method) treats each year like an annuity payment: it spreads the current balance across the years left at an assumed annual return, so the percentage withdrawn climbs as the horizon shortens. Because it recomputes off the live balance every year, it reacts to the market while still front-loading more spending than a flat percentage.
What the Variable Percentage Withdrawal (VPW) strategy trades off
VPW pulls more lifetime spending out of the same portfolio than a flat rule, by lifting the withdrawal percentage as the horizon shortens and recomputing off the live balance each year. Income moves with the portfolio in both directions, and the path hinges on the assumed return.
Pros and cons
Pros
- Maximises spending over the full horizon
- Adapts to both market returns and remaining lifespan
- Backed by the well-documented Bogleheads methodology
Cons
- Income is variable and can drop after bad years
- Sensitive to the assumed-return input
- Late-life withdrawal rates get aggressive
Parameters you can adjust
- Assumed annual return: The yearly return the amortization assumes when spreading the balance over the remaining years. A higher assumption front-loads more spending early (and less later).
Backtest Variable Percentage Withdrawal (VPW) against market history
Opens the simulator with Variable Percentage Withdrawal (VPW) already selected, so you only set your portfolio and horizon.