How long will my money last in retirement?
It depends on three things: how much you take, what the money earns, and how fast your spending rises. This tool starts on the day you stop working. To plan the saving years too, use the retirement calculator.
| Savings | $3,000/mo | $4,000/mo | $5,000/mo | $6,000/mo | $8,000/mo |
|---|---|---|---|---|---|
| $500,000 | 17 yrs 1 mo | 12 yrs 1 mo | 9 yrs 4 mos | 7 yrs 8 mos | 5 yrs 7 mos |
| $750,000 | 29 yrs 4 mos | 19 yrs 10 mos | 15 yrs | 12 yrs 1 mo | 8 yrs 9 mos |
| $1,000,000 | 46 yrs 9 mos | 29 yrs 4 mos | 21 yrs 7 mos | 17 yrs 1 mo | 12 yrs 1 mo |
| $1,500,000 | Over 100 years | 59 yrs 4 mos | 38 yrs 11 mos | 29 yrs 4 mos | 19 yrs 10 mos |
| $2,000,000 | Over 100 years | Over 100 years | 69 yrs 2 mos | 46 yrs 9 mos | 29 yrs 4 mos |
Small changes move these numbers a lot. On $1,000,000 at $4,000 a month, a return of 4% instead of 5% changes 29 yrs 4 mos to 25 yrs 1 mo. Test a lower return before you trust a result.
How much can I withdraw per month in retirement?
Choose "How much can I spend?" and the tool solves for the highest starting amount that lasts exactly your plan. It takes each withdrawal at the start of the month, earns a month of return on what's left, and raises spending once a year.
| Years it must last | At 4% | At 5% | At 6% |
|---|---|---|---|
| 20 | $4,853 | $5,305 | $5,778 |
| 25 | $4,018 | $4,483 | $4,974 |
| 30 | $3,464 | $3,942 | $4,451 |
| 35 | $3,070 | $3,561 | $4,088 |
| 40 | $2,776 | $3,280 | $3,824 |
Your withdrawal rate is your first year's withdrawals divided by your savings. $4,000 a month from $1,000,000 is $48,000 a year, or 4.8%. For a yearly figure from the table, multiply by 12.
Withdrawal rate = first-year withdrawals ÷ savings at the startIs the 4% rule a safe withdrawal rate?
It's a rule of thumb, not a promise. At 4%, $1,000,000 gives you $40,000 in year one, raised with inflation after that. It comes from William Bengen's 1994 study of past US markets. In his data, a 4% start never ran out in under 33 years, while 4.25% could run out in as little as 28.
Those results describe history and a specific mix of stocks and bonds. On a steady 5% with 2.5% raises, the same 4% lasts 38 yrs 11 mos. On a steady 4%, it lasts 31 yrs 5 mos. Your own result depends on the return you assume, and no one knows it in advance.
Why a good average return can still run out
Once you're withdrawing, the order of returns matters. A loss in the first few years hits your largest balance and forces you to sell low, leaving less to recover. The same loss near the end does far less harm.
| Spending per month | Two losing years first | Two losing years last |
|---|---|---|
| $3,000 | Lasts, with $142,194 left | Lasts, with $1,578,599 left |
| $4,000 | Runs out after 19 yrs 9 mos | Lasts, with $664,151 left |
| $5,000 | Runs out after 14 yrs 6 mos | Runs out after 27 yrs 5 mos |
The calculator also runs 600 seeded simulated market paths, using your average return and a volatility you can change. The default is 12% a year, an example.
| Spending per month | Withdrawal rate | Simulated success rate |
|---|---|---|
| $2,000 | 2.4% | 95% |
| $2,500 | 3% | 86% |
| $3,000 | 3.6% | 71% |
| $3,500 | 4.2% | 54% |
| $4,000 | 4.8% | 36% |
| $5,000 | 6% | 16% |
Notice what happens at the "most you can spend" answer. That figure only works if every year earns exactly the average. At $3,942 a month, 39% of simulated paths got through. A plan that survives bad markets needs to start lower, or be ready to cut spending.
How Social Security, taxes, and RMDs change your withdrawals
- Other income. Add Social Security or a pension under advanced options. It cuts what you take from savings. On $1,200,000 and $6,000 a month, waiting 12 years for $2,400 a month of other income lasts 29 yrs 6 mos, against 46 yrs 9 mos if it started right away. The Social Security calculator can help you pick a date.
- Taxes. Spending is after tax, so a withdrawal has to be larger. At a 15% average rate, $4,000 of spending takes a $4,706 withdrawal, and $1,000,000 lasts 23 yrs 4 mos. Roth withdrawals may be tax free, and this flat rate doesn't model your actual brackets.
- Required withdrawals. The IRS says you generally must start taking money from traditional IRAs and retirement plans at age 73, though Roth IRAs have no such rule during the owner's life. This tool doesn't model that. An RMD can be more than your plan's withdrawal. See the RMD calculator.
When this estimate will mislead you
The steady result looks more certain than it is. It leaves out fees, which lower your real return, and health or long-term care costs, which can arrive late and large. It also assumes you never change your spending, even though you might cut back after a bad year. A fee-only planner or tax professional can test this with your actual accounts. For a fuller picture, read how much you need to retire.
Common questions
How long will $1 million last in retirement?
At a steady 5% with 2.5% raises, it lasts 46 yrs 9 mos at $3,000 a month, 21 yrs 7 mos at $5,000, and 12 yrs 1 mo at $8,000. These are before tax and assume no bad stretches.
How is this different from a retirement calculator?
A retirement calculator plans your whole life, including the years you're saving. This one starts when you stop working and asks only how the money lasts. Use the retirement calculator to see if you're on track before that day.
What does the simulated success rate mean?
It's the share of random market paths in the model that didn't run out in your plan's years. It depends on the return and volatility you enter, and it uses a fixed seed so results repeat. It isn't your chance of success.
Should I use my expected return or a lower one?
Try several. A rule of thumb is no substitute for testing, and a lower number shows how much room you have. The default 5% is an example, not a forecast.
Does this work with an IRA or 401(k)?
Yes, for the math. Enter the total balance and an average tax rate. It doesn't model required minimum distributions, early withdrawal penalties, or which account to draw from first.
Sources
- Determining Withdrawal Rates Using Historical Data (William P. Bengen, 1994, reprinted 2004) · Financial Planning Association
- Retirement topics: Required minimum distributions (RMDs) · Internal Revenue Service