How long will your money last?
Retirement spending is a tug-of-war between two forces. Your portfolio is trying to grow at whatever return your mix of investments earns, while your withdrawals — climbing each year to keep pace with inflation — pull the balance back down. This calculator runs that contest year by year: it adds the assumed return, subtracts an inflation-adjusted withdrawal, and repeats until the money is gone, reporting the number of years it lasted. If your investments consistently out-earn what you take out, the balance keeps rising and the plan is sustainable, shown here as lasting 60 years or more. The point is not to predict the future but to see how sensitive the outcome is to the return, withdrawal and inflation figures you choose.
For a fuller picture of saving towards the number you will draw down here, see ourretirement calculator, and if you are weighing early retirement, theFIRE calculatorworks through the savings rate that gets you there.
Worked example
Picture a retiree with $1,000,000 saved who withdraws $50,000 in the first year, expects a 6% annual return, and raises the withdrawal with 2% inflation each year. Here is how the tug-of-war plays out:
| Step | Amount |
|---|---|
| Retirement savings | $1,000,000 |
| Withdrawal in year 15% of savings, rising 2% with inflation each year afterwards | $50,000 |
| Assumed annual return2% inflation leaves a real return of about 4.0% | 6% |
| 4% rule reference amountwhat the classic guideline would suggest withdrawing in year one | $40,000 |
| = Savings laststarting above the 4% guideline, the balance is drawn down and runs out after 37 years | 37 years |
Computed with this calculator's default settings — open the tool above and you'll see the same numbers, then adjust the return, inflation, or withdrawal to test your own plan.
The 4% rule and its limits
The best-known shortcut for retirement spending is the 4% rule. It grew out of research by the financial planner William Bengen and the later Trinity study, which tested how various withdrawal rates would have fared across US market history. Their finding was that withdrawing roughly 4% of the starting balance in year one, then raising that dollar amount with inflation each year, gave a balanced portfolio a high chance of lasting about 30 years. That is a genuinely useful anchor, but it comes with caveats worth taking seriously. It is a rule of thumb built on US historical returns, not a guarantee; today's higher valuations and lower starting yields may offer a thinner cushion; a retirement that runs 40 years rather than 30 demands more caution; and investment fees quietly eat into the same margin the rule relies on.
Sequence-of-returns risk and how to manage it
Averages hide a danger that matters enormously in retirement: the order in which returns arrive. A run of poor years early on is far more destructive than the same poor years later, because you are withdrawing from a balance that is already shrinking. Selling assets to fund spending in a downturn locks in losses and leaves less capital to recover when markets turn, so an early slump can permanently bend the path of the portfolio downward. This is sequence-of-returns risk, and it is why two retirees with identical average returns can end up in very different places.
The good news is that the same risk can be tamed. Flexible spending — being willing to trim withdrawals in weak years rather than mechanically raising them with inflation — does much of the work. A cash buffer of one to two years of expenses lets you avoid selling investments straight after a fall. And resisting the temptation to over-withdraw in the early, more vulnerable years protects the capital base that everything else depends on. If part of your plan involves converting savings into a guaranteed income stream instead, ourannuity payout calculatorshows what a lump sum might pay out.
Frequently asked questions
What is the 4% rule?
The 4% rule is a retirement spending guideline drawn from the work of William Bengen and the later Trinity study. It suggests that if you withdraw about 4% of your starting portfolio in the first year of retirement and then adjust that dollar amount for inflation each year afterwards, a balanced stock-and-bond portfolio would historically have lasted around 30 years in the United States. It is a useful starting point rather than a precise prescription, because it is based on past US market returns and assumes a fixed time horizon.
How long will my retirement savings last?
How long your savings last depends on four things: how much you start with, how much you withdraw each year, what return your portfolio earns, and how fast inflation pushes your spending higher. This calculator grows your balance at the return you assume while subtracting a withdrawal that rises with inflation each year, then counts the years until the money runs out. If the portfolio keeps growing faster than you draw it down, the spending may be sustainable indefinitely, which the tool reports as lasting 60 years or more.
Is the 4% rule still safe?
The 4% rule was derived from US historical data, so it carries no guarantee for the future. Today low starting yields, high equity valuations, longer retirements and investment fees can all reduce the margin of safety that the original studies assumed. Many planners now treat a figure closer to 3 to 3.5% as more cautious for a long retirement, while others keep 4% but stay ready to trim spending in weak years. The right rate for you depends on your time horizon, your willingness to adjust, and your costs.
What is sequence-of-returns risk?
Sequence-of-returns risk is the danger that the order in which returns arrive, not just their average, decides whether your money lasts. Poor returns in the first few years of retirement are far more damaging than the same poor returns later, because you are selling assets to fund withdrawals while the balance is already shrinking. That locks in losses and leaves less capital to recover when markets rebound. Two retirees with identical average returns can end up with very different outcomes purely because of when the bad years fell.
How much can I safely withdraw in retirement?
A safe withdrawal amount has no single answer, but the main levers are your time horizon, your expected return after fees, and how flexible your spending can be. A shorter retirement can support a higher rate, while a 40-year horizon argues for caution. Keeping a cash buffer so you do not have to sell investments after a market fall, and being willing to spend a little less in poor years, both let you start somewhat higher with less risk of running out. Modelling several return and inflation assumptions, rather than trusting one figure, gives a more honest picture.
Disclaimer: This calculator is foreducation and illustration only. It assumes a fixed annual return and inflation rate, whereas real markets vary year to year and sequence-of-returns risk can change outcomes materially. The figures it produces are not projections for any individual and do not account for taxes, fees or guarantees. Nothing here is investment, tax, or retirement advice.