Find out how long your savings will last. Enter your balance, how much you withdraw each year, the return you expect and inflation, and see the number of years before the money runs out. Free, private, and runs entirely in your browser.
Each month the calculator takes one twelfth of your yearly withdrawal from the balance, then adds a month of investment growth. Every year the withdrawal rises by the inflation rate so that your spending power stays the same. It repeats until the balance reaches zero, up to 100 years.
How long will $500,000 last in retirement? At $40,000 a year with a 5% return and 3% inflation, about 14 years 6 months. At $60,000 a year it lasts about 9 years 2 months.
Does the money last forever if the return is higher than the withdrawals? Only if the growth keeps ahead of both your withdrawals and inflation. A 4% starting withdrawal on $1,000,000 with a 5% return and 3% inflation is expected to last 34 years 8 months in this model.
You have $500,000, withdraw $40,000 a year (8% of the balance), earn 5% and expect 3% inflation. The withdrawals rise to about $41,200 in year 2 and keep growing. The balance after 10 years is about $229,169.56, and the money runs out after about 14 years 6 months, with $713,919.75 withdrawn in total.
What withdrawal rate is considered sustainable? A common rule of thumb is about 4% of the starting balance, adjusted for inflation each year, which was designed to last about 30 years in historical US data. Your own plan may differ.
Can I use it for a savings goal other than retirement? Yes. It works for any pot of money that you draw down at a steady rate, such as a sabbatical or an education fund.
The 4% rule comes from financial planner William Bengen, who studied historical returns in a 1994 paper and found that a retiree could withdraw about 4% of the starting portfolio, adjusted for inflation, for at least 30 years. The 1998 Trinity study by three finance professors supported similar results, and the idea became a standard rule of thumb. Modern planners treat it as a starting point and adjust for returns, fees and spending needs.
Use this calculator to test a retirement plan, to see how much a change in spending matters, or to decide how much to save. For example, $1,000,000 withdrawing $40,000 a year with a 5% return and 3% inflation lasts 34 years 8 months in this model. This is an estimate for planning, not financial advice, so consider a qualified adviser for decisions.
How do I include Social Security? Subtract the yearly Social Security income from your total spending and enter the difference as the yearly withdrawal.
What happens if I withdraw more at the start? Early withdrawals reduce the amount that can grow, so a high early withdrawal rate shortens the life of the savings much more than a high rate later.