The question that comes after "how much do I need?"
Most retirement tools stop at the accumulation number — the big balance at 65. But the harder question starts the day you stop earning: can you actually live off it for thirty years without running dry?
That depends on three things fighting each other: how much you withdraw, how the remaining balance grows, and how fast inflation raises the cost of the life you want. This calculator runs all three, one year at a time.
How the simulation works
spendingnext = spending × (1 + inflation)
The 4% guideline, in context
The famous rule says: withdraw 4% in year one, then raise that amount with inflation each year. On a $1,000,000 portfolio that's $40,000 in the first year, about $41,200 the next, and so on.
It came from historical US market data and held up across almost all 30-year windows. It's a reasonable anchor — but treat it as a starting point, not a promise. It assumes a particular asset mix, a 30-year horizon, and that you never adjust spending regardless of what markets do.
The risk nobody feels until it happens: sequence of returns. Losing 20% in your first two years of retirement while still withdrawing does permanent damage — you sell more shares at low prices and there's less left to recover. The same average return arriving in a different order can be completely survivable. This is why retirees who can cut spending temporarily in bad years do so much better than the arithmetic suggests.
If the numbers don't work, you have four levers
- Spend less. The most powerful lever — a 10% cut often adds many years to the portfolio.
- Work longer. Doubly effective: more years of saving and fewer years of withdrawal.
- Save more now, if retirement is still ahead — see the 401(k) calculator.
- Keep some income early on. Part-time work in the first years dramatically reduces sequence risk.
What this model deliberately does not include
Honesty matters more than a comforting number, so: this simulation assumes a steady return every year, which real markets never deliver. It doesn't model taxes on withdrawals, Social Security or pension income, healthcare cost spikes, or the fact that most retirees naturally spend less as they age.
Use it to compare scenarios and see which levers matter — not as a forecast of your actual balance in year 27. For a plan you're going to rely on, a fee-only financial planner can model taxes and income sources properly.
Frequently asked questions
What is the 4% rule?
It suggests withdrawing 4% of your portfolio in the first year of retirement, then increasing that amount with inflation each year. It came from studies of historical US market data showing that this rate survived 30-year retirements in almost all past periods. It is a useful starting point, not a law.
How long will my retirement savings last?
It depends on your withdrawal rate, your investment returns and inflation. Enter your numbers above and the calculator simulates each year — growing the remaining balance, increasing your spending with inflation, and reporting the year the money would run out if it does.
Why does my spending increase each year in the model?
Because inflation makes the same lifestyle cost more over time. Holding spending flat in nominal terms would quietly assume you accept a falling standard of living every year. Modelling real, inflation-adjusted spending is the honest approach.
What is sequence of returns risk?
It is the danger of poor market returns in the first few years of retirement. Withdrawing from a falling portfolio locks in losses and permanently reduces what is left to recover. Two retirees with identical average returns can have very different outcomes depending on the order those returns arrive — which is why flexibility in early retirement matters so much.
What can I do if the money runs out too early?
Four levers: spend less, work a little longer, save more before retiring, or keep some part-time income in the early years. Small changes compound — reducing annual spending by 10% often extends a portfolio by many years. Try adjusting the numbers above to see which lever moves your outcome most.