Planning for retirement or a long-term sabbatical requires understanding the "burn rate" of your capital. This Savings Withdrawal Calculator helps you visualize how long your nest egg will survive based on market growth and the eroding power of inflation.
The Importance of Inflation in Withdrawals
Most basic calculators overlook inflation. However, $40,000 today will not have the same purchasing power in 20 years. Our calculator applies an annual percentage increase to your withdrawal amount to ensure your lifestyle remains consistent as prices rise.
The Mathematics of Depletion
The calculation follows a year-by-year progression:
Growth Phase: Your remaining balance earns the annual growth rate.
Withdrawal Phase: Your specified amount is removed from the balance.
Adjustment Phase: The withdrawal amount for the subsequent year is increased by the inflation rate.
Example Calculation
Imagine you have $1,000,000 in savings. You plan to withdraw $40,000 per year (the common 4% rule). If your investments grow at 6% and inflation sits at 3%:
Year 1: $1M grows to $1.06M. You withdraw $40k. Balance: $1.02M.
Year 2: $1.02M grows. You withdraw $41,200 (inflation-adjusted).
In this scenario, your money would likely last over 45 years because the growth rate exceeds the initial withdrawal rate and inflation impact.
Strategies for Sustainable Withdrawals
If the calculator shows your funds depleting too early, consider these three levers:
Lower the Withdrawal Rate: Reducing your annual spend by even 0.5% can add years to your savings.
Asset Allocation: Shifting toward a more growth-oriented portfolio may increase your growth rate, though it increases volatility.
Delayed Start: Allowing the initial balance to grow for a few more years before starting withdrawals significantly changes the math.
function calculateSavingsLife() {
var initialBalance = parseFloat(document.getElementById('initialSavings').value);
var annualWithdrawal = parseFloat(document.getElementById('annualWithdrawal').value);
var growthRate = parseFloat(document.getElementById('growthRate').value) / 100;
var inflationRate = parseFloat(document.getElementById('inflationRate').value) / 100;
var resultsDiv = document.getElementById('withdrawal-results');
var longevityOutput = document.getElementById('longevity-output');
var detailOutput = document.getElementById('detail-output');
if (isNaN(initialBalance) || isNaN(annualWithdrawal) || isNaN(growthRate) || isNaN(inflationRate)) {
alert("Please enter valid numeric values for all fields.");
return;
}
if (initialBalance <= 0 || annualWithdrawal 0 && years < maxYears) {
// Apply growth first
currentBalance = currentBalance * (1 + growthRate);
// Subtract withdrawal
currentBalance = currentBalance – currentWithdrawal;
if (currentBalance initialBalance) {
years = "Infinity";
break;
}
}
resultsDiv.style.display = "block";
if (years === "Infinity") {
longevityOutput.innerHTML = "Your Savings Will Last Forever";
detailOutput.innerHTML = "Your growth rate is high enough that your balance continues to grow even after inflation-adjusted withdrawals. You are living off the interest!";
} else if (years >= maxYears) {
longevityOutput.innerHTML = "100+ Years";
detailOutput.innerHTML = "Based on these figures, your savings will last more than a century. You have a very sustainable withdrawal plan.";
} else {
longevityOutput.innerHTML = "Approximately " + years + " Years";
detailOutput.innerHTML = "With a starting balance of $" + initialBalance.toLocaleString() + ", your funds will be depleted in " + years + " years. Total amount projected to be withdrawn: $" + Math.round(totalWithdrawn).toLocaleString() + ".";
}
resultsDiv.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}