Find out how long your savings or retirement nest egg will last when you withdraw a set amount each month, including investment growth and rising withdrawals for inflation.
How the calculator works
Each month, your remaining balance earns the expected return and your withdrawal is taken out. Once a year, the withdrawal rises by your inflation rate so your spending keeps its buying power. The calculator repeats this until the money runs out.
Worked example
You retire with $600,000, withdraw $3,000 a month ($36,000 a year, a 6% first-year withdrawal rate), earn 5% a year and raise withdrawals 2.5% a year for inflation. Your savings last about 21 years and 9 months.
Without inflation increases, the same withdrawals would last about 34 years and 7 months. And withdrawing only about $2,444 a month, roughly what the balance earns, would keep the $600,000 intact indefinitely in this simple model.
The 4% guideline
A well-known rule of thumb from retirement research suggests that withdrawing about 4% of your savings in the first year, then adjusting for inflation, has historically lasted around 30 years for a balanced portfolio. In the example, 4% of $600,000 is $24,000 a year, or $2,000 a month. It is a starting point for planning, not a guarantee.
What makes money last longer
- A lower withdrawal rate, especially in the early years.
- Flexible spending: cutting back slightly after poor market years.
- Other income, such as Social Security, a pension or part-time work, which reduces what you need to withdraw.
- Delaying Social Security, which increases the monthly benefit for many people.
- Keeping investment fees low.
Sequence-of-returns risk
This calculator assumes the same return every year. In reality, a market drop in the first few years of withdrawals hurts far more than the same drop later, because you are selling investments while prices are low. Many retirees keep one to two years of spending in cash to avoid selling in a downturn.
Frequently asked questions
What return should I assume?
Use a conservative figure that matches your mix of investments. Many planners use 4% to 6% for a balanced retirement portfolio. Try a lower rate to stress-test your plan.
Should I include Social Security?
Yes, indirectly: subtract your expected Social Security or pension income from your spending needs, and enter only the amount you need to withdraw from savings.
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Results are estimates for planning and education only. They are not financial, tax, legal or medical advice. Check important numbers with a qualified professional.