How Long Will Your Retirement Savings Last?
One of the most important — and anxiety-inducing — questions in personal finance is whether your retirement portfolio will outlast you. The answer depends on three variables: how much you've saved, how much you spend each year, and what return your investments earn while you're drawing them down.
This calculator uses the standard present-value depletion formula to model your portfolio over time. Each year, it applies your assumed return to the remaining balance, then subtracts your gross withdrawal (adjusted for your effective tax rate). The year the balance reaches zero is when your savings run out.
The 4% Rule — and Its Limits
The "4% rule" originated from the 1994 Trinity Study and became the default retirement planning benchmark: withdraw 4% of your initial portfolio each year, and historically your money has lasted 30+ years in ~95% of market scenarios. For a $1 million portfolio, that's $40,000/year.
But the 4% rule has real limitations. It was designed for a 30-year retirement. If you retire at 55, you may need your money to last 40+ years, which requires a 3–3.5% withdrawal rate to achieve the same historical safety margin. It also assumes a 50/50 stock-bond allocation — a more aggressive or conservative portfolio changes the math significantly.
The Real Risk: Sequence of Returns
The biggest threat to retirement portfolios isn't average returns — it's the sequence of those returns. If you retire into a market downturn (as many did in 2000 or 2008), early losses permanently impair your portfolio's ability to recover. A 30% drop in year one of retirement is far more damaging than a 30% drop in year twenty, because you're selling depleted assets to fund your lifestyle. This calculator uses average return assumptions; real outcomes will vary based on when exactly market downturns occur.
How to Use This Calculator
Total portfolio value: Your combined retirement savings — 401(k), IRA, Roth IRA, brokerage accounts. Don't include home equity unless you plan to liquidate it.
Annual withdrawal: Your expected annual spending in retirement, after tax. Include housing, food, healthcare, travel — everything. Most financial planners suggest budgeting 70–80% of pre-retirement income as a starting point.
Annual return assumption: The expected average return on your portfolio during retirement. A balanced 60/40 portfolio has historically returned 6–7% nominally. Conservative retirees use 5%; aggressive planners use 8%.
Withdrawal tax rate: Applies to 401(k) and traditional IRA withdrawals, which are taxed as ordinary income. Roth withdrawals are tax-free. Use 0% if all your savings are in Roth accounts.
What "Sustainable Forever" Means
When the calculator shows your savings are "sustainable indefinitely," it means your portfolio's annual return exceeds your gross withdrawal amount. Your balance grows faster than you spend it. This is the goal of FIRE (Financial Independence, Retire Early) planning — building enough wealth that you can live entirely off investment returns without touching the principal.
Extending Your Retirement Runway
If your current numbers show your savings depleting before age 85–90, you have several levers: reduce annual spending (even $5,000/year less has a dramatic compounding effect on longevity), increase your portfolio before retiring, delay retirement by 1–2 years (which both grows the portfolio and shortens the drawdown period), or optimize your tax situation through Roth conversions to reduce the gross-up required on each withdrawal.