How Long Will My Money Last?

How the projection works

The calculator runs your balance forward one month at a time rather than applying a single formula, which is the only way to handle withdrawals that rise while the balance falls. Each month it does three things in this order:

1. Takes the withdrawal first. You need the cash at the start of the month, before it has had a chance to grow. Any other income you entered covers part of it, so only the shortfall comes out of savings.
2. Grows what is left. The remaining balance earns one month of return.
3. Steps up once a year. Every twelfth month, the withdrawal and the other income both rise by the annual increase, so your spending keeps its buying power.

The monthly rate is the twelfth root of the annual rate, not the annual rate divided by twelve. That matters: dividing by twelve quietly turns a 5% assumption into 5.12% a year once it compounds, which flatters the result. Tax is applied to the return rather than the withdrawal, which is how tax on interest, dividends and gains actually bites in a drawdown.

Worked example: $500,000 at $3,000 a month

Take $500,000 in savings, a $3,000 monthly withdrawal, a 5% annual return and a 2.5% annual increase to keep pace with prices — the figures the calculator opens with.

• The money lasts 17 years and 2 months.
• You withdraw $757,951 in total — half as much again as you started with.
• $257,951 of that came from growth, not from your original savings.

Now strip out the assumptions. With no investment return and no inflation increase, the same pot at the same $3,000 a month lasts 13 years and 11 months — simply $500,000 divided by $3,000. The three years and three months of difference is entirely the product of what you assume about returns and inflation, which is why it pays to run the calculation two or three times with different rates rather than trusting a single answer.

How long common balances last

Every figure below comes from the calculator above, run at a 5% annual return with withdrawals rising 2.5% a year. Find your balance on the left and your monthly withdrawal along the top.

Two patterns are worth noticing. First, the relationship is not proportional: doubling the balance from 50,000 to 00,000 at ,000 a month more than doubles the runway, from 7 years 9 months to 17 years 2 months, because a larger pot earns more while it is being drawn down. Second, at ,000 a month a ,000,000 balance never runs out at all — the 5% return outpaces the withdrawals, and the balance grows indefinitely. That crossover point is the practical definition of a sustainable withdrawal rate.

How to make the money last longer

Four levers are available, and they are not equally powerful:

1. Spend less, especially early. Cutting ,000 to ,700 a month on a 00,000 balance buys roughly two extra years. Early reductions matter more than late ones, because the money you do not spend keeps compounding.
2. Delay the start. Every year you leave the pot untouched works twice: it grows, and you draw from it for one year fewer.
3. Add guaranteed income. Anything that covers part of your spending — a pension, an annuity, part-time work — reduces the monthly shortfall, which is the number the projection actually consumes.
4. Improve the real return. The least reliable lever, because it is the one you control least. A higher expected return also carries more variability, and variability is what sequence-of-returns risk feeds on.

What changes the answer most

In order of how much they move the result:

• The withdrawal amount. It is the only input that acts directly and immediately on the balance every single month. Cutting it by 10% typically buys far more time than a 1% better return.
• The gap between return and inflation. What matters is not the 5% or the 2.5% on their own but the roughly 2.4% real return between them. Two scenarios with the same gap behave almost identically.
• Other income. A pension covering even a third of your spending extends the runway dramatically, because it reduces the shortfall drawn every month.
• Tax on returns. Meaningful over long horizons, but smaller than the three above.

What this calculator does not do

It is a planning tool, not a forecast. Three limits are worth stating plainly:

• Returns are assumed to be steady. Real markets are not. A run of poor years early in retirement does far more damage than the same years later, because you are selling from a smaller pot — the effect known as sequence-of-returns risk. A steady-rate projection cannot show it.
• Income tax on withdrawals is not modelled. The tax field reduces investment returns. Whether the withdrawal itself is taxed depends on the account type and your personal circumstances.
• Spending is assumed to be smooth. Real retirements have lumpy years: a new roof, a car, medical costs, a period of higher spending early on.

Treat the result as the answer to "if nothing changes, roughly when does this run out?" — a question worth answering, but not a substitute for advice from a qualified financial professional who knows your full situation.

Frequently asked questions

How long will $500,000 last in retirement?

Withdrawing $3,000 a month from $500,000, earning 5% a year and increasing withdrawals by 2.5% a year for inflation, the money lasts 17 years and 2 months. Without any investment return and without inflation it would last 13 years and 11 months. The return and the inflation rate you assume change the answer more than any other input.

What is the 4% rule?

The 4% rule is a rule of thumb that withdrawing 4% of your starting balance in the first year, then increasing that amount with inflation, has historically lasted about 30 years. It is a starting point, not a guarantee: it was derived from one country's market history over a particular period, and it assumes you never adjust course.

Does this calculator account for inflation?

Yes. The annual withdrawal increase raises your monthly withdrawal once every twelve months, so your spending keeps its buying power as prices rise. Set it to zero if you want to see the result in flat, unadjusted amounts instead.

Should I include Social Security or a pension?

Enter it in the other monthly income field. That income covers part of your spending, so only the shortfall is drawn from savings, which extends how long the balance lasts. Other income is increased each year at the same rate as your withdrawals.

What investment return should I assume?

Use a rate that matches how the money is actually invested, and be conservative. A portfolio held mostly in cash or short-term bonds earns far less than one held in shares, and a lower assumed return is the safer planning error to make. Try two or three rates and see how much the answer moves.

Does it account for tax?

The tax rate field reduces the investment return, which is how tax on interest, dividends and gains affects a drawdown. It does not model income tax on the withdrawals themselves, which depends on the account type and your personal situation.

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