What is the How Long Will My Money Last Calculator?
The How Long Will My Money Last Calculator helps you determine how many years your current savings or investment portfolio will support your spending. Whether you are approaching retirement, pursuing financial independence, or simply trying to understand your financial runway, this tool shows you exactly how long your money will last given your expected withdrawal amount, investment returns, and inflation.
Enter your total portfolio value, planned annual withdrawal, expected return rate, and inflation rate. The calculator simulates your portfolio month by month, adjusting withdrawals for inflation and growing the balance with investment returns. If you have Social Security, a pension, or other income, you can enter that too — the tool uses only the net amount drawn from your portfolio.
The result is a concrete number: how many years your money will last, a chart showing your balance declining over time, and a breakdown of your withdrawal rate compared to the widely-used 4% safe withdrawal benchmark.
How it calculates
The calculator runs a month-by-month simulation using these steps:
1. Apply monthly investment return: Balance = Balance x (1 + Monthly Return Rate) 2. Adjust the monthly withdrawal upward for inflation 3. Subtract the net monthly withdrawal from the balance 4. Repeat until the balance reaches zero or 50 years pass
**Key formulas:**
Monthly Return = Annual Return Rate / 12 Monthly Inflation Adjustment = Prior Month Withdrawal x (1 + Annual Inflation / 12) Net Monthly Withdrawal = Annual Withdrawal / 12 - Other Monthly Income
**Withdrawal Rate** = (Annual Withdrawal / Starting Portfolio) x 100
This approach captures the compounding interaction between returns and withdrawals more accurately than a simple division formula. A portfolio earning 7% while withdrawing 4% inflated annually will last far longer than one earning 0%.
The 4% Rule
The 4% rule is one of the most studied concepts in retirement planning. It originates from the Trinity Study (1994), which examined historical stock and bond returns and found that a retiree withdrawing 4% of their initial portfolio per year — adjusted annually for inflation — had a very high probability of the portfolio lasting 30 years.
Key points about the 4% rule:
- It was designed for a 30-year retirement horizon, not necessarily longer - It assumes a diversified portfolio (roughly 60% stocks, 40% bonds) - It does not guarantee success in all market conditions - For early retirees (FIRE) with 40-50 year horizons, many advisors suggest 3-3.5% - Adding other income sources like Social Security significantly improves portfolio survival
The calculator shows your withdrawal rate as a percentage and flags rates above 6% as high-risk and rates at or below 4% as historically sustainable.
Who should use this
- **Retirees** planning withdrawals from an IRA, 401(k), or brokerage account who want to know if their savings will last their lifetime - **Pre-retirees** within 5-10 years of retirement who want to stress-test different withdrawal scenarios - **FIRE movement participants** (Financial Independence, Retire Early) calculating whether their portfolio can support early retirement for 40-50 years - **Anyone receiving a lump sum** (inheritance, severance, business sale) who needs to understand how long it will last - **Financial planners and advisors** looking for a quick scenario tool to share with clients
How to use
1. Enter your current portfolio or savings total in the "Current Portfolio / Savings" field 2. Enter your expected annual withdrawal — this is the total amount you plan to spend from savings each year 3. Set your expected annual return rate (7% is a common assumption for a balanced stock/bond portfolio) 4. Set the inflation rate (3% is a common long-term average) 5. If you will receive Social Security, pension, or part-time income, enter the annual amount in "Other Annual Income" — this reduces your net draw from the portfolio 6. Review the main result showing estimated years, withdrawal rate, total withdrawn, and the balance-over-time chart
FAQs
Q: What withdrawal rate is considered safe? A: Most financial research points to 4% as a safe withdrawal rate for a 30-year retirement using a balanced portfolio. For longer retirements (40+ years), 3% to 3.5% provides more cushion. Rates above 6% carry significant risk of depleting the portfolio prematurely.
Q: What return rate should I use? A: A diversified portfolio of stocks and bonds has historically returned around 6-8% annually before inflation. Using 7% is common for long-term planning. Conservative planners often use 5-6% to account for sequence-of-returns risk in the early years of retirement.
Q: What inflation rate should I use? A: The long-term average US inflation rate is around 3%. Some planners use 2-2.5% based on recent Federal Reserve targets, while others use 3.5% for a more conservative estimate. Healthcare expenses in retirement can inflate faster than the general rate.
Q: Does the calculator account for taxes? A: No. The calculator does not model taxes on withdrawals. If you are drawing from a traditional IRA or 401(k), your actual after-tax income will be lower than the withdrawal amount. Consider increasing your withdrawal amount to account for taxes, or consult a tax advisor.
Q: What if my portfolio never runs out? A: If your investment returns outpace your inflation-adjusted withdrawals, the portfolio can grow indefinitely. The calculator caps the simulation at 50 years and shows "50+ Years" in this case. This typically happens when your withdrawal rate is well below the portfolio return rate.
Q: Should I include my home equity or other illiquid assets? A: No. Only include assets you can actually draw from — savings accounts, brokerage accounts, IRAs, 401(k)s, and similar liquid investments. Home equity, vehicles, and collectibles are not reliably liquid sources of retirement income.
Q: What is sequence-of-returns risk? A: This is the risk that poor investment returns early in retirement can permanently damage a portfolio, even if long-term average returns are fine. This calculator uses a constant return rate and does not simulate market volatility. For a more conservative estimate, reduce your assumed return rate by 1-2%.
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