One of the most pressing questions for anyone planning retirement or living off savings is: how long will my money last? Whether you're approaching retirement, taking a career break, or managing an inheritance, understanding the longevity of your savings is essential for financial security. Our calculator helps you answer this question by modeling your withdrawals against investment returns, inflation, and taxes.

How does this calculator work?

This calculator takes your current savings, desired monthly withdrawals, estimated investment return on your savings, inflation rate, and your tax bracket, then calculates how many years your savings will last before being depleted.

The calculation uses a month-by-month simulation that:

Applies your expected annual investment return to your remaining balance (divided into monthly increments)
Subtracts your monthly withdrawal amount
Adjusts for inflation's impact on purchasing power
Accounts for taxes on investment gains
Continues until your balance reaches zero

This approach provides a more accurate picture than simple division because it accounts for the compounding effect of your investments continuing to grow even as you withdraw funds.

Understanding the key factors

Several factors significantly influence how long your savings will last. Understanding each one helps you make informed decisions about your withdrawal strategy.

Starting savings balance

Your initial savings balance is the foundation of this calculation. This includes all liquid assets you plan to draw from: retirement accounts (401(k), IRA, Roth IRA), taxable brokerage accounts, savings accounts, CDs, and any other investments you're willing to tap.

The relationship between savings and longevity isn't linear. Doubling your savings more than doubles how long your money lasts because you have more capital generating returns while you withdraw. For example, $500,000 might last 15 years with$ 3,000 monthly withdrawals, but $1,000,000 could last 35+ years with the same withdrawal rate because the larger balance generates significantly more investment income.

Monthly withdrawal amount

Your withdrawal amount is often the factor you have the most control over. This represents your monthly spending needs minus any guaranteed income sources like Social Security, pensions, or annuities.

Consider that your withdrawal needs may change over time. Many retirees experience three distinct spending phases:

Go-go years (early retirement): Higher spending on travel, hobbies, and activities while health permits
Slow-go years (mid-retirement): Spending often decreases as activity levels naturally decline
No-go years (late retirement): Spending may decrease further, though healthcare costs often rise

When entering your withdrawal amount, consider whether you're using today's dollars (which our calculator will adjust for inflation) or if you're planning for variable withdrawals over time.

Expected investment return

Your investment return has a profound impact on how long your savings last. Even small differences in returns compound significantly over decades.

Here are typical long-term return expectations for different asset classes:

U.S. stocks (S&P 500): Historically around 10% nominal, 7% after inflation
International stocks: Similar to U.S. stocks, though with more variability
Bonds (aggregate): Historically around 5% nominal, 2% after inflation
Cash/money market: Typically around inflation rate (0% real return)
Real estate (REITs): Historically 8-10% nominal

A balanced portfolio of 60% stocks and 40% bonds has historically returned approximately 8% before inflation. However, future returns may differ from historical averages, and many financial planners recommend using more conservative estimates (5-6%) for retirement planning to build in a margin of safety.

Inflation rate

Inflation silently erodes your purchasing power over time. A 3% inflation rate means that what costs $1,000 today will cost$ 1,344 in ten years and $1,806 in twenty years.

Our calculator accounts for inflation by reducing your effective investment return. If you expect 7% investment returns and 3% inflation, your real (inflation-adjusted) return is approximately 4%. This gives you a more realistic picture of how your savings will support your lifestyle over time.

Historical U.S. inflation has averaged about 3% annually, though it has varied significantly:

1970s: 7-13% annual inflation
1990s-2010s: 2-3% annual inflation
2021-2023: 4-9% annual inflation

For conservative planning, using a 3% inflation assumption is reasonable, though you may want to stress-test your plan with higher rates.

Tax considerations

Taxes can significantly impact your savings longevity, but the effect varies based on your account types:

Traditional 401(k)/IRA: Withdrawals are taxed as ordinary income. Your effective tax rate depends on your total taxable income in retirement.
Roth 401(k)/IRA: Qualified withdrawals are tax-free, so no adjustment needed.
Taxable brokerage accounts: You'll pay capital gains taxes on investment growth (typically 0%, 15%, or 20% depending on income) plus taxes on dividends.

The calculator's tax rate input should reflect the blended effective rate across your accounts. If most of your savings is in Roth accounts, you can use a lower rate. If it's primarily in traditional accounts, use your expected marginal tax rate.

Withdrawal strategies for making your money last

Beyond the basic calculation, several established strategies can help optimize how you draw down your savings.

The 4% rule

The 4% rule is the most widely known retirement withdrawal guideline. Developed by financial planner William Bengen in 1994, it states that you can withdraw 4% of your initial portfolio balance in the first year of retirement, then adjust that dollar amount for inflation each subsequent year.

For example, with a $1,000,000 portfolio:

Year 1: Withdraw $40,000 (4% of$ 1,000,000)
Year 2: Withdraw $41,200 (assuming 3% inflation)
Year 3: Withdraw $42,436
And so on...

Bengen's research, based on historical U.S. market returns, showed this approach had a high probability of lasting at least 30 years. He recommended a portfolio allocation of 50-75% stocks and 25-50% bonds.

However, the 4% rule has limitations:

It's based on historical U.S. data, which may not predict future returns
It assumes a fixed 30-year retirement period
It doesn't account for changing spending needs
Current low interest rates may reduce safe withdrawal rates

Many financial planners now suggest 3-3.5% as a more conservative starting point, especially for early retirees or those expecting longer retirements.

The $1,000-a-month rule

A simpler rule of thumb is the $1,000-a-month rule: for every$ 1,000 per month you want to spend from savings, you need approximately $240,000 saved.

This translates to a 5% annual withdrawal rate, which is more aggressive than the 4% rule. It may work for shorter retirement periods (20 years or less) or when combined with other income sources, but it carries higher risk of depleting savings prematurely over a 30+ year retirement.

Dynamic withdrawal strategies

Rather than sticking to a fixed withdrawal amount, dynamic strategies adjust based on portfolio performance:

Guardrails approach: Set upper and lower boundaries around your initial withdrawal rate (e.g., 4% plus or minus 20%). If your portfolio grows significantly, you can increase withdrawals. If it declines, you reduce spending to preserve capital.

Percentage of portfolio: Withdraw a fixed percentage of your current portfolio value each year (e.g., 4%). This automatically adjusts for market performance but creates variable income year to year.

Required Minimum Distribution (RMD) method: Use IRS RMD tables to determine withdrawals. This approach naturally reduces the percentage withdrawn as you age, based on actuarial life expectancy.

The bucket strategy

The bucket strategy divides your portfolio into three "buckets" based on time horizon:

Short-term bucket (1-2 years): Cash and money market funds for immediate expenses. This provides stability and prevents selling investments during downturns.
Medium-term bucket (3-10 years): Bonds and conservative investments. This bucket replenishes the short-term bucket and provides moderate growth.
Long-term bucket (10+ years): Stocks and growth investments. This bucket has time to recover from market volatility and provides long-term growth.

This approach psychologically separates your spending money from your growth investments, potentially helping you stay invested during market downturns.

Understanding sequence of returns risk

One of the biggest risks to retirement savings is sequence of returns risk—the danger that poor investment returns early in retirement can permanently damage your portfolio, even if average returns over the full period are acceptable.

Consider two retirees who both experience average 7% returns over 20 years, but in different sequences:

Retiree A experiences good returns early, then poor returns later
Retiree B experiences poor returns early, then good returns later

Even with identical average returns, Retiree B's portfolio may be significantly smaller or depleted because early losses occurred while the portfolio was largest, and withdrawals during down years accelerated the decline.

This risk is why many planners recommend:

Holding 2-3 years of expenses in cash or short-term bonds
Reducing stock allocation slightly in the years around retirement
Having flexibility to reduce withdrawals during market downturns
Considering partial annuitization to guarantee baseline income

Common mistakes to avoid

Underestimating longevity

Many people underestimate how long they'll live. A 65-year-old couple has a 50% chance that at least one spouse will live to age 90. Planning for a 30-35 year retirement is prudent, even if it seems overly conservative.

Ignoring healthcare costs

Healthcare expenses typically increase with age and can be substantial. Medicare doesn't cover everything, and long-term care costs can quickly deplete savings. Consider building a healthcare buffer into your withdrawal calculations or exploring long-term care insurance.

Failing to account for taxes

Forgetting that traditional retirement account withdrawals are taxed as ordinary income is a common oversight. A $50,000 withdrawal might only provide$ 40,000 or less after federal and state taxes. Factor in your expected tax rate when determining how much you need to withdraw.

Not adjusting for inflation

Fixed withdrawal amounts that seemed adequate at retirement may feel tight after 15-20 years of inflation. Always think in terms of real (inflation-adjusted) returns and plan for your expenses to increase over time.

Being too conservative or too aggressive

Being overly conservative (keeping everything in cash) means inflation will erode your purchasing power. Being overly aggressive (100% stocks) means you may have to sell during downturns. A balanced approach appropriate for your timeline typically works best.

Planning for different scenarios

Early retirement (before age 59½)

If you're planning to retire before traditional retirement age, you face additional challenges:

Limited access to retirement accounts without penalties (though exceptions exist)
Longer retirement period requiring more conservative withdrawal rates
Higher healthcare costs before Medicare eligibility at 65
Potentially decades without Social Security income

Early retirees often need to rely more heavily on taxable brokerage accounts initially, consider Roth conversion ladders, or use the Rule of 55 for 401(k) access.

Semi-retirement or career breaks

If you're taking a temporary break from work rather than permanent retirement, your calculation changes. You may be comfortable with a higher withdrawal rate knowing you'll return to earning income, or you might choose to live on a bare-bones budget to preserve capital for true retirement.

Social Security timing

For most people, Social Security represents a significant guaranteed income source. The timing of when you claim benefits (anywhere from age 62 to 70) dramatically affects your savings needs:

Claiming at 62: Benefits are reduced by about 30% compared to full retirement age
Claiming at 70: Benefits are increased by about 24% compared to full retirement age

Delaying Social Security effectively "purchases" a higher guaranteed income stream, which can reduce the burden on your savings and decrease the risk of running out of money.

Stress-testing your plan

A single calculation provides a baseline, but it's wise to test your plan against various scenarios:

Lower returns: What if your investments return 2% less than expected?
Higher inflation: What if inflation averages 4-5% instead of 3%?
Market crash: What if your portfolio drops 30% in year one of retirement?
Longer life: What if you live to 95 or 100?
Healthcare emergency: What if you need $100,000+ for medical expenses?

Running these scenarios helps you understand the robustness of your plan and identify where you might need contingencies.

When to revisit your calculations

Your initial calculation isn't set in stone. Review your withdrawal plan:

Annually: Check if your actual spending matches projections
After major market moves: A 20%+ gain or loss may warrant adjustment
Life changes: Health changes, marriage, divorce, or inheritance
Every few years: Update assumptions based on actual experience

The goal isn't to predict the future perfectly—it's to have a reasonable plan that you adjust as circumstances change.

The bottom line

Knowing how long your money will last provides peace of mind and helps you make informed decisions about spending, investing, and lifestyle. While no calculator can predict the future with certainty, understanding the key variables—savings balance, withdrawal rate, investment returns, inflation, and taxes—empowers you to plan wisely.

Use this calculator as a starting point, then consider consulting a financial planner for personalized guidance. With proper planning, you can structure your savings to support you throughout retirement with confidence.

How Long Will My Money Last?

Balance over time