Withdrawal calculator
How long will your money last?
Enter savings, withdrawal and return. You see at once how long the money lasts and what a crash in year one changes.
What do you want to know?
Your money lasts
23 years and 1 month
Withdrawn in total
$523,547
Savings and withdrawals year by year
- Savings at year end
- Withdrawn so far
Based on your assumptions, not a forecast or a recommendation. Same return every year, before taxes and costs.
How it is calculated
- The return per year becomes the effective monthly rate: the twelfth root of 1 plus the return, minus 1. At 5% that is 0.407% a month, not 5% divided by 12.
- Each month the savings grow by the monthly rate, and the withdrawal comes off at month end. With inflation, the withdrawal rises by the chosen rate after every twelve months.
- Calculate duration: the calculator counts the months until the savings are used up. The last month only gets what is left.
- Calculate withdrawal: without inflation this is the annuity, savings times monthly rate divided by 1 minus (1 plus monthly rate) to the power of minus the number of months. With inflation, the calculator searches for the withdrawal that leaves exactly 0 at the end.
- Preserve savings: without inflation you only withdraw the income, savings times monthly rate. With inflation, enough stays invested for the savings to grow by inflation every year and keep their purchasing power.
- The crash makes the savings fall month by month by 30% in total during the first year while withdrawals continue. After that the chosen return applies again.
Assumptions and notes
- The return is the same every year. Real prices fluctuate, and with withdrawals the order matters: bad years at the start shorten the duration more than bad years at the end.
- Taxes and costs are not deducted. In a taxable account, usually only the gain portion of the units you sell is taxed.
- The withdrawal comes at month end. Withdrawing at the start of the month runs out slightly sooner.
- State pensions and other income are not included. Enter as the withdrawal only what your savings should contribute.
A worked example
$300,000 sits in a portfolio that returns 5% a year on average. You withdraw $1,500 a month and raise the withdrawal by 2% inflation every year. The money then lasts 23 years and 1 month, you withdraw $523,547 in total, and $2,365 a month at the end.
Without the yearly increase, the same $300,000 lasts 34 years and 6 months. If the portfolio falls 30% in the first year, it lasts only 13 years and 10 months with the increase.
To keep the savings intact, the withdrawal is $1,222 a month. To keep their purchasing power too, it starts at $733 and then rises by 2% every year.
Frequently asked questions
What is a withdrawal plan?
A withdrawal plan pays you an amount every month from invested savings, such as an ETF portfolio, while the rest stays invested and keeps earning. If you withdraw more than the savings earn, they are gradually used up. This calculator shows how fast.
How much do I need for $1,000 a month?
At a 5% return a year and withdrawals over 30 years down to 0, you need $188,660. If the withdrawal rises by 2% inflation every year, it is $237,635. If you do not want to touch the savings, it is $245,452, or $409,086 to keep their purchasing power.
How much can I withdraw without using up my savings?
At a 5% return, $100,000 yields $407 a month if you only withdraw the income. If the savings should also keep their purchasing power at 2% inflation, it starts at $244 and then rises with inflation. With fluctuating prices even that is not certain, because the return does not come evenly every year.
What is the 4% rule?
A rule of thumb from US studies in the 1990s: withdraw 4% of the savings in the first year, then raise the withdrawal by inflation every year. With US stocks and bonds, this almost always lasted 30 years in the past. With $300,000 that is $1,000 a month, which in this calculator lasts 45 years and 7 months at a 5% return and 2% inflation.
What happens if markets crash early on?
It weighs more than a crash later, because you sell units at low prices during the weak phase. With $300,000, $1,500 a month, a 5% return and 2% inflation, the money lasts 23 years and 1 month. If the portfolio falls 30% in the first year, it lasts only 13 years and 10 months. Some people therefore keep the first years of withdrawals in cash.
Is inflation taken into account?
Yes, if you switch it on: the withdrawal then rises by the chosen inflation after every year, and its purchasing power stays the same. Without this adjustment, the same withdrawal buys only about two thirds as much after 20 years at 2% inflation.
How are withdrawals taxed?
That depends on your country and account. In a taxable account you usually pay tax only on the gain portion of the units you sell. In the US, withdrawals from a traditional IRA or 401(k) are taxed as ordinary income, qualified Roth withdrawals are tax-free. The calculator shows amounts before tax.