Your savings will last approximately this many years.
Understanding Your Retirement Withdrawal Longevity
This calculator helps you estimate how long your retirement savings might last based on your current nest egg,
your planned annual withdrawals, expected investment growth, and the impact of inflation. It's a crucial tool
for retirement planning, helping you visualize potential scenarios and make informed decisions about your financial future.
How the Calculation Works
The core of this calculator simulates a year-by-year withdrawal process. In each year, the remaining savings are:
Increased by the expected annual investment return: The portfolio grows based on your assumed rate of return.
Decreased by the withdrawal amount: You take out your planned income.
Adjusted for inflation: The amount you need to withdraw in the following year increases to maintain purchasing power.
The simulation continues until the savings are depleted. The number of years this process takes is the result displayed.
Formula Logic (Simplified Representation)
Let:
$S_0$ = Initial Savings
$W_n$ = Withdrawal in Year $n$
$R$ = Annual Investment Return Rate (as a decimal)
$I$ = Annual Inflation Rate (as a decimal)
$n$ = Year
The withdrawal in year $n$ is adjusted for inflation: $W_n = W_1 \times (1+I)^{n-1}$.
The savings balance at the end of year $n$, $S_n$, is calculated from the balance at the end of year $n-1$, $S_{n-1}$:
$S_n = S_{n-1} \times (1+R) – W_n$
The calculator iteratively applies this formula year by year, counting how many years it takes for $S_n$ to fall below zero.
Important Considerations:
Assumptions are Key: The accuracy of this calculator depends heavily on the assumptions you make for investment returns and inflation. These rates can fluctuate significantly.
Investment Strategy: This calculator assumes a consistent rate of return. Actual returns will vary based on market performance and your investment allocation.
Taxes: This calculation does not account for taxes on investment gains or withdrawals, which can further reduce your net income.
Variable Withdrawals: Real-life retirement needs may vary. Unexpected expenses or changes in lifestyle can alter your withdrawal patterns.
Longevity Risk: Planning for a longer lifespan than anticipated is prudent. This calculator helps identify if your current plan might fall short.
Use this calculator as a guide to understand potential outcomes. It's recommended to consult with a qualified financial advisor to create a comprehensive retirement plan tailored to your specific circumstances and risk tolerance.
function calculateWithdrawalDuration() {
var currentSavings = parseFloat(document.getElementById("currentSavings").value);
var annualWithdrawalAmount = parseFloat(document.getElementById("annualWithdrawalAmount").value);
var annualReturnRate = parseFloat(document.getElementById("annualReturnRate").value) / 100;
var inflationRate = parseFloat(document.getElementById("inflationRate").value) / 100;
var withdrawalYears = parseInt(document.getElementById("withdrawalYears").value);
var resultDiv = document.getElementById("result");
var yearsDurationSpan = document.getElementById("yearsDuration");
if (isNaN(currentSavings) || isNaN(annualWithdrawalAmount) || isNaN(annualReturnRate) || isNaN(inflationRate) || isNaN(withdrawalYears)) {
yearsDurationSpan.textContent = "Please enter valid numbers for all fields.";
resultDiv.style.backgroundColor = "#ffc107"; // Warning yellow
resultDiv.style.color = "#333";
return;
}
if (currentSavings <= 0 || annualWithdrawalAmount <= 0 || withdrawalYears 0 && years 0) {
currentWithdrawal = currentWithdrawal * (1 + inflationRate);
years++;
} else {
// If savings become negative after withdrawal, the last year counts but the withdrawal effectively depleted it.
// We count this year as the one where funds ran out if the withdrawal was attempted.
if (currentWithdrawal > 0) { // Ensure a withdrawal was actually made this last cycle
years++;
}
break; // Savings depleted
}
}
if (years >= 150) {
yearsDurationSpan.textContent = "Potentially indefinite or very long.";
resultDiv.style.backgroundColor = var(–success-green);
resultDiv.style.color = "white";
} else {
yearsDurationSpan.textContent = Math.round(years * 10) / 10; // Round to one decimal place
resultDiv.style.backgroundColor = var(–success-green);
resultDiv.style.color = "white";
}
}