How this calculator works
The calculator runs a month-by-month simulation of your portfolio. Each month, your balance grows at your expected annual return (converted to a monthly compound rate), then your spending minus any Social Security or pension income is withdrawn. If you keep “adjust with inflation” checked, both your spending and your benefits rise a little every month so they match your stated annual inflation rate after a full year — approximating how Social Security cost-of-living adjustments work.
Your answer is the number of months until the balance reaches zero. Treat the result as a planning estimate, not a prediction: real markets don’t move in a straight line, and a bad first decade of returns (sequence-of-returns risk) can shorten the outcome even when the average return is the same.
Key inputs, explained
- Total savings today — everything you plan to draw from: 401(k), IRA, brokerage, savings. Social Security and pension income go in their own field below, not here.
- Monthly retirement spending — the amount you need to live on each month, after taxes. The calculator automatically subtracts your outside income to find the portfolio withdrawal.
- Social Security / pension income — optional monthly income from outside your portfolio. Benefits are assumed to start at the age you enter (leave blank for none). If your benefits are $0 before they begin, withdrawals equal your full spending until then.
- Expected annual return — an assumed average, not a guaranteed rate. A 60/40 stock/bond portfolio has historically averaged about 6–7% nominal; many planners model 4–5% to be conservative.
- Inflation — how fast your spending grows. The US long-run average is roughly 3%.
Methodology & assumptions
- Investment returns are assumed to be constant every year (a straight-line model). Market volatility is not modeled.
- Inflation is assumed constant at the rate you enter.
- Taxes and investment fees are not included. Enter spending on an after-tax basis.
- Sequence-of-returns risk is not modeled.
- Social Security and pension income is treated as level real income starting at the age you choose; cost-of-living adjustments are approximated using your inflation rate.
- Required Minimum Distributions (RMDs), healthcare spikes and changing spending patterns are not modeled.
What the 4% rule says
A widely used benchmark is the 4% rule: withdraw 4% of your portfolio in year one, then raise that dollar amount with inflation every year. In historical backtests — William Bengen’s 1994 study and the later Trinity study — this strategy made a diversified portfolio last about 30 years across most retirement periods. For a quick check, 4% of $500,000 is about $1,670 per month; 4% of $1,000,000 is about $3,330 per month.
Ways to make your money last longer
- Cut the withdrawal rate. Dropping from 6% to 4% of your balance can add a decade or more of runway.
- Delay Social Security. For people born in 1943 or later, benefits grow 8% per year of delay between full retirement age and 70, according to the Social Security Administration — effectively buying guaranteed income.
- Keep some growth assets. An all-cash portfolio loses to inflation; a mix of stocks and bonds has historically outpaced it.
- Hold a cash buffer. One to two years of expenses in cash lets you avoid selling investments in a downturn.
- Watch taxes. Withdrawals from traditional 401(k)/IRA accounts are taxed as income — plan withdrawals to avoid creeping into higher brackets.
Sources
- Social Security Administration — late retirement & delayed retirement credits (8% per year for those born 1943+, up to age 70)
- William P. Bengen (1994), “Determining Withdrawal Rates Using Historical Data,” Journal of Financial Planning — origin of the 4% rule
- Cooley, Hubbard & Walz (1998), the “Trinity study,” AAII Journal — portfolio survival over 30-year periods
- US Bureau of Labor Statistics — Consumer Price Index (long-run US inflation)
Frequently asked questions
How long will $500,000 last in retirement?
It depends on your spending, returns and any Social Security or pension income. With a common scenario — $500,000, withdrawing $3,000 per month adjusted for 3% inflation, at a 5% average annual return — the money lasts about 16 years. Reduce withdrawals to $2,300 per month and it stretches beyond 22 years. Add $2,000 per month of Social Security starting at 67 and $4,000-per-month spending lasts over 23 years.
How long will $1,000,000 last?
At $4,000 per month (inflation-adjusted, 5% return), $1,000,000 lasts around 27 years. At $3,000 per month it can last 40 years. The higher your withdrawal rate relative to your balance, the faster the money runs out.
How long will $2 million last in retirement?
At $8,000 per month of portfolio withdrawals (inflation-adjusted, 5% return), $2 million lasts about 27 years. At $5,000 per month it can last more than 50 years. Because duration depends on your withdrawal rate rather than the dollar amount, $2 million lasts exactly as long as $1 million spent down at half the rate.
What is the 4% rule?
The 4% rule suggests withdrawing 4% of your portfolio in your first year of retirement, then adjusting that amount for inflation each year. Historical backtests (William Bengen's 1994 study and the Trinity study) found this strategy sustained a diversified portfolio for roughly 30 years across most historical periods.
Does this calculator account for taxes?
No — taxes are not included in the calculation. Withdrawals from tax-deferred accounts such as a traditional 401(k) or IRA are taxed as ordinary income, while qualified withdrawals from Roth accounts are generally tax-free. Enter a spending estimate on an after-tax basis: the amount you actually need to withdraw each month to cover your life.
How much can I withdraw each month in retirement?
As a planning guide: with a 5% average return and 3% inflation, $1,000,000 supports about $3,670 per month for 30 years, or about $3,000 per month for 40 years. The calculator shows your exact sustainable monthly spending after you enter your own numbers.
How much money do I need to retire?
A common rule of thumb is 25–30 times your expected annual spending, not covered by Social Security or pensions — the inverse of the 4% rule. For example, if you need $50,000 per year from your portfolio, that suggests $1.25–$1.5 million in savings. Your actual number depends on returns, inflation and how long you need the money to last.
How can I make my money last longer?
The most effective levers are: reducing annual withdrawals, delaying Social Security or pension start dates (Social Security benefits grow about 8% per year you delay between full retirement age and 70), keeping a portion of your portfolio in growth assets, and holding 1–2 years of expenses in cash to avoid selling in downturns (sequence-of-returns risk).