This calculator helps estimate how long your retirement savings might last based on withdrawals and growth assumptions.
Estimated Retirement Duration:
—
Years
Understanding Retirement Amortization
Retirement amortization refers to the process of gradually depleting your retirement savings over time through regular withdrawals. Unlike a loan amortization which focuses on paying down debt, retirement amortization is about drawing down an asset. The key factors influencing how long your savings last are your initial savings amount, your annual withdrawal rate, the investment returns your portfolio generates, and the impact of inflation on your purchasing power.
This calculator provides an estimate of your retirement's "longevity" based on your inputs. It simulates year-by-year how your savings might grow (or shrink) based on the assumed investment return, and how your withdrawals (adjusted for inflation) reduce the principal.
How the Calculation Works
The calculator performs a year-by-year simulation. For each year:
Calculate Inflation-Adjusted Withdrawal: The withdrawal amount for the current year is calculated by adjusting the previous year's withdrawal for inflation. The formula used is:
Current Year Withdrawal = Previous Year Withdrawal * (1 + Inflation Rate / 100)
Calculate Investment Growth: The remaining savings from the previous year grow by the assumed annual investment return.
Growth Amount = Remaining Savings * (Annual Return Rate / 100)
Calculate End-of-Year Balance: The balance is updated by adding the growth and subtracting the inflation-adjusted withdrawal.
End of Year Balance = (Remaining Savings + Growth Amount) - Current Year Withdrawal
Check for Depletion: If the End of Year Balance becomes zero or negative, the simulation stops, and the number of years is recorded.
If the savings never deplete (e.g., due to very high returns relative to withdrawals), the calculator may run for a very large number of years, indicating sustainability under those assumptions.
Key Inputs Explained:
Initial Retirement Savings: The total amount of money you have saved and invested at the start of your retirement.
Annual Withdrawal Amount: The amount of money you plan to withdraw from your savings each year, typically for living expenses. This is the amount at the *start* of retirement.
Assumed Annual Investment Return (%): The average annual percentage gain you expect from your investments (stocks, bonds, etc.) throughout your retirement. This is a crucial assumption and can significantly impact the outcome. It's often expressed as a nominal rate before inflation.
Assumed Annual Inflation Rate (%): The average annual rate at which prices for goods and services are expected to rise. This erodes the purchasing power of your money, meaning you'll need more dollars each year just to maintain the same lifestyle.
Use Cases & Considerations:
This calculator is a valuable tool for:
Retirement Planning: Helping individuals visualize how long their savings might last.
Withdrawal Strategy Testing: Allowing users to experiment with different withdrawal amounts and see the impact.
Understanding Market Volatility: While this uses average rates, real-world returns fluctuate. Consider running scenarios with more conservative return assumptions.
Fee Impact: This calculator does not explicitly account for investment management fees or taxes, which will further reduce your net returns and potentially shorten the lifespan of your savings.
Disclaimer: This is a simplified financial tool for estimation purposes only. It does not constitute financial advice. Actual results may vary significantly due to market fluctuations, changes in spending needs, unexpected life events, and tax implications. Consult with a qualified financial advisor for personalized retirement planning.
function calculateAmortization() {
var initialSavings = parseFloat(document.getElementById("initialSavings").value);
var annualWithdrawal = parseFloat(document.getElementById("annualWithdrawal").value);
var annualReturnRate = parseFloat(document.getElementById("annualReturnRate").value) / 100; // Convert percentage to decimal
var inflationRate = parseFloat(document.getElementById("inflationRate").value) / 100; // Convert percentage to decimal
var durationResultElement = document.getElementById("durationResult");
// Input validation
if (isNaN(initialSavings) || initialSavings <= 0) {
durationResultElement.textContent = "Invalid Input";
durationResultElement.style.color = "red";
return;
}
if (isNaN(annualWithdrawal) || annualWithdrawal <= 0) {
durationResultElement.textContent = "Invalid Input";
durationResultElement.style.color = "red";
return;
}
if (isNaN(annualReturnRate) || annualReturnRate < -1) { // Allowing negative returns up to -100%
durationResultElement.textContent = "Invalid Input";
durationResultElement.style.color = "red";
return;
}
if (isNaN(inflationRate) || inflationRate 0 && years < maxYears) {
// Calculate growth for the year
var growth = currentSavings * annualReturnRate;
// Update savings before withdrawal
currentSavings += growth;
// Check if savings are sufficient for withdrawal
if (currentSavings = maxYears) {
durationResultElement.textContent = "Indefinite (or >" + maxYears + ")";
durationResultElement.style.color = "#28a745"; // Success Green
} else if (currentSavings <= 0) {
durationResultElement.textContent = years.toString();
durationResultElement.style.color = "#dc3545"; // Red for depletion
} else {
// This case should theoretically not be reached if loop terminates correctly
durationResultElement.textContent = years.toString();
durationResultElement.style.color = "#28a745"; // Default to green if still positive
}
}