How Long Can Retirement Savings Last?
A retirement balance can look large and still disappear quickly if withdrawals are too high. This calculator estimates the number of monthly payments available from a starting balance after applying a constant monthly return and a fixed withdrawal amount.
The result is useful for comparing scenarios. Try several withdrawal levels, reduce the expected return, and remember that inflation will usually push spending higher over time. The calculation does not model market volatility, taxes, fees, required distributions, healthcare costs, or changing spending patterns.
If the withdrawal is no greater than the interest earned in the first month, the simplified model reports an indefinite duration. That is a mathematical result, not a guarantee that the purchasing power of the account will remain intact.
How to Calculate Retirement Duration
Step One: Convert the annual return to a monthly return
Monthly withdrawals require a monthly rate.
monthly return = annual investment return / 12
6% / 12 = 0.5% per month
Step Two: Check the first month’s interest
Compare the first month’s interest with the planned withdrawal.
first month interest = startingBalance × monthly return
$600,000 × 0.005 = $3,000
Because the planned withdrawal is $5,000, it exceeds the first month’s interest and the balance declines.
Step Three: Solve for the number of payments
Use the declining-annuity duration formula.
months = -log(1 - (startingBalance × monthly return / monthlyWithdrawal)) / log(1 + monthly return)
-log(1 - ($600,000 × 0.005 / $5,000)) / log(1.005) = 212.8 months
Step Four: Convert months into years
Divide the number of payments by 12.
years = months / 12
212.8 / 12 = 17.73 years