Determine how long your retirement savings will last based on your withdrawal rate and inflation.
How Long Will Your Retirement Money Last?
Planning for retirement is a balancing act between your current nest egg, the rate at which you spend it, and the invisible impact of inflation. This Retirement Withdrawal Calculator uses a year-by-year simulation to project the longevity of your portfolio. Unlike simple division, this tool accounts for compounding returns on your remaining balance and the increasing cost of living.
Understanding the 4% Rule
The "4% Rule" is a common benchmark in retirement planning. It suggests that if you withdraw 4% of your portfolio in the first year of retirement and adjust that amount for inflation every year thereafter, your money has a high probability of lasting 30 years. For example, with a $1,000,000 portfolio, you would withdraw $40,000 in Year 1. If inflation is 3%, you would withdraw $41,200 in Year 2.
Key Factors in Retirement Longevity
Sequence of Returns Risk: The order in which you earn investment returns matters. Poor returns in the early years of retirement can significantly shorten your portfolio's life.
Inflation Protection: Even moderate inflation of 3% can double the cost of goods over 24 years. Your withdrawal strategy must account for this purchasing power loss.
Asset Allocation: A mix of stocks and bonds typically provides the growth needed to outpace inflation, though it introduces market volatility.
Example Calculation
Suppose you have $500,000 saved. You plan to withdraw $25,000 (a 5% initial rate) annually. If your investments grow at 7% and inflation is 3%, your savings would last approximately 33 years. However, if the market only returns 4%, your funds may be exhausted in 22 years. This highlights the importance of conservative estimates when planning for the long term.
function calculateLongevity() {
var savings = parseFloat(document.getElementById('currentSavings').value);
var withdrawal = parseFloat(document.getElementById('annualWithdrawal').value);
var annualReturn = parseFloat(document.getElementById('expectedReturn').value) / 100;
var inflation = parseFloat(document.getElementById('inflationRate').value) / 100;
var resultDiv = document.getElementById('retirementResult');
if (isNaN(savings) || isNaN(withdrawal) || isNaN(annualReturn) || isNaN(inflation)) {
resultDiv.style.display = 'block';
resultDiv.className = 'result-danger';
resultDiv.innerHTML = 'Please enter valid numbers in all fields.';
return;
}
var currentBalance = savings;
var currentWithdrawal = withdrawal;
var years = 0;
var maxYears = 100; // Cap to avoid infinite loops
while (currentBalance >= currentWithdrawal && years = 100) {
statusClass = 'result-success';
message = "Your portfolio is highly sustainable! 100+ Years Based on these figures, your savings will likely outlive you.";
} else if (years >= 30) {
statusClass = 'result-success';
message = "Your portfolio is robust. " + years + " Years This meets the standard 30-year retirement benchmark.";
} else if (years >= 15) {
statusClass = 'result-warning';
message = "Your portfolio has moderate longevity. " + years + " Years Consider reducing withdrawals or adjusting your investment strategy.";
} else {
statusClass = 'result-danger';
message = "Caution: High risk of exhaustion. " + years + " Years Your current withdrawal rate may be too aggressive for your savings level.";
}
resultDiv.className = statusClass;
resultDiv.innerHTML = message;
}