Dave Ramsey's 8% withdrawal rate calculator
Ramsey’s retirement example withdraws 8% a year. Run that rate against your own balance, return and inflation, watch the year your money runs out, and compare it with the rate two research groups actually found safe.
Dave Ramsey Reviewed Aug 6, 2026 Rule located in Ramsey Solutions, 2026 Portrait: Gage Skidmore, CC BY-SA 3.0, via Wikimedia Commons. Self-hosted by JMM.
Put your numbers through the rule
The source establishes the rule. The values below belong to you, and the output is JMM's deterministic calculation.
Every field recalculates immediately. Changed values can be copied into a shareable URL.
- First-year income
- $80,000
- Ending balance in today’s dollars
- $72,554
- Years funded at 4%
- 30
- Return after inflation
- 7.8%
Balances are shown in today’s dollars, so a flat line means spending power is being preserved. The return and inflation figures are your scenario, not a forecast, and one fixed return hides the sequence risk that decides real retirements.
Year 5
- At 8%
- $950,110
- At 4%
- $1,201,828
Year 10
- At 8%
- $877,592
- At 4%
- $1,495,194
Year 15
- At 8%
- $772,185
- At 4%
- $1,921,615
Year 20
- At 8%
- $618,970
- At 4%
- $2,541,438
Year 25
- At 8%
- $396,266
- At 4%
- $3,442,379
Year 30
- At 8%
- $72,554
- At 4%
- $4,751,939
What the source says, and what the calculator adds
Source-supported ruleRamsey Solutions builds its worked retirement example on an 8% withdrawal rate, and justifies it with a return assumption stated on the same page: the S&P 500 has averaged between 10% and 12% a year, with the example itself running at 11% based on the 1928 to 2025 average. 
JMM calculationJMM runs that rate as a real drawdown rather than a division. The first withdrawal is 8% of the starting balance, every later withdrawal rises with inflation, the remainder compounds at your entered return, and the model reports the year the balance reaches zero against a second rate you choose. 
What changes the answer
The withdrawal rate and the return assumption are one argument
Eight percent is only defensible if the portfolio really earns 11% or more. Drop the return to 7% and the same withdrawal empties the account decades early. The two fields have to be argued together, never separately.
Inflation is charged twice and counted once
The rule is usually stated as an 11% return minus 4% inflation leaving 7 or 8% to spend. But the withdrawal itself also has to rise with prices, so inflation reduces the return and increases the spending. This model applies it to both, which is why the survival number falls so fast.
Who else has run the numbers on this rule
Everyone below has published a position on this specific rule with a figure attached. Each row names the document, the date and the passage, so you can check the number rather than take ours.
- MAmy C. Arnott, Christine Benz, Jason Kephart and Tao GuoMorningstar portfolio and retirement research team, in the firm’s annual retirement income studyAgainst the rule
3.9% base case; 3.4% worst case for a 100% equity portfolio over 30 years
Morningstar’s forward-looking base case for a new retiree wanting steady inflation-adjusted spending across 30 years is 3.9%, less than half the Ramsey figure, and it comes from a portfolio holding 30% to 50% in equities rather than 100%. Their historical table is the sharper rebuttal: across rolling 30-year periods from 1926, an all-equity portfolio supported a starting withdrawal rate of 18.0% at best, 3.4% at worst, and 8.2% on average. Ramsey’s 8% is the average outcome sold as the safe one.
3.9% is the highest starting safe withdrawal rate for retirees seeking a consistent level of inflation-adjusted spending from year to year
MorningstarDec 3, 2025The State of Retirement Income: 2025Portfolio and Planning Research, dated Dec. 3, 2025. Page 1, first Key Takeaway, and the equity-weighting takeaway on the same page. Page 3, Exhibit 2, “Highest and Lowest Starting Safe Withdrawal % by Asset Allocation”, 100% equity row: best 18.0, worst 3.4, average 8.2. - EKarsten JeskePhD in economics, CFA, former Federal Reserve Bank of Atlanta economist and ten years at BNY Mellon Asset Management; author of a long-running safe-withdrawal-rate research seriesAgainst the rule
About a 56% to 61% failure rate over 30 years, depending on the simulation start date
Jeske ran Ramsey’s figure directly against US market history: an 8% withdrawal from a 100% equity portfolio over a 30-year retirement, inflation-adjusted. The portfolio ran out of money in the majority of historical starting cohorts, and the result worsened when the retirement began from an expensive market.
With the 8% withdrawal rate, you have an overall failure rate of about 56-61%, depending on the simulation start date.
Early Retirement NowNov 12, 2023How Crazy is Dave Ramsey’s 8% Withdrawal Rate Recommendation?Failure-rate discussion following the historical simulation tables, covering a 30-year horizon at a 100% equity allocation.
Every research group that has tested this number found roughly half of it. JMM would not run 8%.
This is the one page on the site where JMM thinks the source is straightforwardly wrong, and it is worth being precise about why rather than joining the pile-on. The 11% return assumption is not the error — that is a fair reading of long-run nominal US equity averages. The error is spending it. An average return is not a floor, inflation raises the withdrawal at the same time it lowers the real return, and a bad first decade permanently changes the arithmetic because you sold shares to fund it. Morningstar’s own historical table puts the worst 30-year outcome for an all-equity portfolio at 3.4%, and its forward-looking base case at 3.9%. An independent researcher running the same test at 8% found the portfolio ran out in the majority of historical retirements. Move the return field on this calculator to something you would actually defend and read the year the money ends. If the answer arrives before you do, the rule is not conservative, it is a bet that you will die on schedule.
Not the calculator’s limits. The rule’s.
It requires 100% equities at exactly the age that is hardest to hold
The 8% figure only works alongside a return that only an all-stock portfolio can plausibly produce. That is the allocation with the widest range of outcomes, being handed to the investor with the least ability to wait out a bad one and the strongest incentive to sell during it.
Averages hide the sequence, and the sequence is the whole risk
Two retirements with identical average returns end differently depending on which years were bad. Losses early are withdrawn against and never recover. A rule stated in averages cannot see this, and it is the single most common way retirement plans fail.
It is stated as safety, not as a bet
A high withdrawal rate with a plan to cut spending in bad years is a legitimate strategy that several researchers endorse. The rule as published carries no such condition, which turns a flexible strategy into a fixed promise it cannot keep.
What this model does not know
- The return is a single flat rate every year. Real markets deliver a sequence, and a bad first decade breaks plans that a flat average would have funded.
- Taxes, fees, Social Security, pensions, annuities and any other income are excluded.
- Spending is assumed to rise with inflation and never to be cut. A retiree who reduces withdrawals in a bad year gets a different, better result than this model shows.
- Long-term care, health shocks and the possibility of living past the entered horizon are outside the model.
Before you use the result
Where does the 8% figure come from?
It appears in the worked example on Ramsey Solutions’ own “How Much Do I Need to Retire?” page, alongside a stated return assumption of 10% to 12% a year and an 11% figure used in the example.
Is 4% the right answer instead?
It is closer. The 4% comparison on this page is the widely used shorthand, and Morningstar’s current forward-looking base case is 3.9%. Both are starting rates for a plan that adjusts, not laws.
Why does the calculator run out of money even at an 11% return?
Because inflation raises the withdrawal every year while reducing what the return is worth. Set inflation to zero and the same 8% survives easily, which shows exactly where the rule’s buffer goes.
Does JMM think Ramsey is wrong?
On this rule, yes, and the verdict section says so with the numbers behind it. Most of the Ramsey framework on this site gets a favourable read; this is the exception.
The next question this page cannot answer
- Guide The 4% rule was never a rule, and it was never really about 4%
Where the competing number comes from, what Bengen actually tested, and the conditions the 4% figure was never meant to survive.
Open → -
Calculator Sequence of returns risk calculator The failure this page can only describe. A flat average hides the order of returns, and the order is what empties the account.
Open → -
Calculator FIRE number and withdrawal-rate calculator Runs the question backwards: the balance a given spending level needs, rather than the spending a given balance allows.
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