How Long Will Retirement Savings Last? Monthly Withdrawal Examples

 

How long savings last depends on the starting balance, withdrawals and investment results. A withdrawal model can show how those assumptions interact, but it cannot guarantee a retirement outcome. A constant-return calculation is especially limited because real markets do not deliver the same return every month.

The Retirement Savings Duration Calculator models monthly withdrawals, a constant effective annual return and an annual increase in withdrawals. It reports depletion if it occurs within the selected horizon, or the balance remaining at the end.

Start with the amount needed from savings

Enter the capital available in the savings pool being modeled and the initial monthly withdrawal. If pensions or other income cover part of your spending, the withdrawal can represent the remaining amount needed from this pool rather than total household expenses.

The model does not calculate taxes, pensions, Social Security, required distributions or account-specific rules. Include their effects consistently in your assumptions rather than treating the calculator as a complete retirement plan.

Calculate a zero-return example

Enter Starting savings 240000 and Initial monthly withdrawal 2000. Leave Annual effective return (%) and Annual withdrawal increase (%) at 0. Keep Projection horizon (years) at 40, then select Calculate savings duration.

Without returns or increases, 240000 / 2000 = 120 monthly withdrawals. The result shows savings depleted in month 120, corresponding to ten modeled years. Total withdrawn is 240000.00, and the remaining balance is zero.

Understand the monthly sequence

At the start of each modeled month, the calculator applies the return to the opening balance. It then deducts the scheduled withdrawal at the end of that month. This timing matters: withdrawing at the beginning instead would produce a different scenario when the return is not zero.

The effective annual return is converted to a monthly rate using (1 + annual return / 100) raised to 1/12, minus 1. It is not simply divided by twelve. Monthly return amounts are rounded to cents before updating the balance.

Account for annual withdrawal increases

An annual increase raises the scheduled monthly amount at each annual anniversary. The initial amount applies for months 1 through 12. The first increase applies at month 13, the next at month 25, and so on.

For example, an initial withdrawal of 1000 with a 3% annual increase becomes 1030 in the second modeled year and 1060.90 in the third. The increase is calculated from the initial withdrawal and the number of completed years, then rounded to cents.

This adjustment can represent inflation-related spending growth, but it does not forecast inflation. Use compatible assumptions: applying a separate inflation increase while also using an inflation-adjusted real return can count inflation twice.

Interpret depletion and partial withdrawals

If the available balance cannot fund the entire scheduled withdrawal, the calculator withdraws what remains and stops. A partial final withdrawal is not counted as a full scheduled payment.

For example, 250 of savings with withdrawals of 100 and no return funds two full withdrawals, followed by a final withdrawal of 50 in month 3. Saying the balance reaches zero in month 3 is different from saying it funds three full months of spending.

Read the horizon result carefully

If money remains at the selected horizon, the calculator reports that balance without inventing a later depletion date. A positive balance after 40 modeled years does not prove the money will last indefinitely.

The year-end table shows balances and cumulative withdrawals, with a final depletion row when applicable. A separate calculation limit stops extreme growth scenarios before the balance exceeds the supported numerical cap; that status is not a successful lifetime projection.

Recognize the limits of constant returns

Actual gains and losses occur in different sequences. With withdrawals, that order can affect outcomes even when long-run average returns look similar. This model does not calculate sequence-of-returns risk, volatility or a probability of success, and it does not recommend a safe withdrawal rate.

Explore alternative assumptions rather than treating one result as a forecast. For accumulation before withdrawals begin, use the Compound Interest Calculator. Obtain appropriate professional advice when evaluating a personal retirement plan.