How this calculator works
Each year the calculator takes your withdrawal from the start-of-year balance and grows the remainder by your real return. Because withdrawals and returns are both in today’s dollars, the withdrawal is effectively raised with inflation each year. It counts the years — including a final partial year — until the balance runs out, up to a 100-year cap. It also shows the starting withdrawal rate (withdrawal ÷ portfolio) and the withdrawal that would keep the real balance flat forever: portfolio × r ÷ (1 + r) for start-of-year withdrawals.
Why a constant return is only a starting point
Actual retirements face sequence-of-returns risk: the same average return can produce very different outcomes depending on when good and bad years arrive. Large losses early in retirement, while withdrawals continue, do lasting damage. That is why research on safe withdrawal rates tests many historical or simulated return paths rather than one average. Morningstar’s published safe starting rate (3.9% in its latest estimate) is set so that about 90% of its modelled 30-year paths would not run out, which is more conservative than the constant-return answer here.
Some reference points
On a $1,000,000 portfolio, the calculator gives these results:
| Yearly withdrawal | 0% real | 2% real | 3% real | 5% real |
|---|---|---|---|---|
| $40,000 (4%) | 25.0 years | 34.0 | 44.1 | 100+ |
| $50,000 (5%) | 20.0 | 25.1 | 29.6 | 62.4 |
| $60,000 (6%) | 16.7 | 20.0 | 22.5 | 32.4 |
Using the result
If the money lasts comfortably beyond your expected horizon even at a modest return, you may have room for flexibility. If it lasts only just long enough at an optimistic return, consider spending less, working longer, or adopting a flexible withdrawal rule that cuts spending after poor years — Morningstar reports that flexible methods supported higher starting rates in its modelling. Also remember taxes: if withdrawals from traditional 401(k) or IRA accounts are taxable, include the tax in your yearly withdrawal. Required minimum distributions and early-withdrawal rules are covered in IRS Publication 590-B and our early-access guide.
Worked example
A $1,200,000 portfolio with $48,000 withdrawn each year is a 4% starting rate. At a constant 3% real return the calculator estimates about 44 years before the money runs out, and the withdrawal that would keep the real balance flat is about $34,951. At a 0% real return the same withdrawal lasts exactly 25 years.
Not a substitute for a plan
This is a deterministic illustration. It does not model Social Security start dates, one-off expenses, changing spending, or taxes. A full planning tool or a fee-only adviser can model those.