How does the how long will money last calculator work?

The calculator models a lump sum that earns a constant rate of return while you withdraw a fixed amount on a regular schedule. It compounds the balance each period, subtracts your withdrawal and repeats until the money is depleted, estimating the number of withdrawals and the time in years and months.

What if my withdrawals are small compared to investment returns?

If your withdrawal amount is less than or equal to the interest earned in each period, the balance may never run out and could even grow over time. In that case, the calculator indicates that your current withdrawal rate appears sustainable rather than giving a depletion date.

Does this calculator include inflation?

No. The calculator works in today's money terms. The withdrawal amount you enter is treated as a fixed nominal amount. If you want to adjust for inflation, you can enter a lower real withdrawal or lower expected return to approximate reduced purchasing power over time.

How Long Will Money Last Calculator — Drawdown Time Estimate

Estimated time until money runs out

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Total withdrawn

—

Sum of all withdrawals until depletion.

Interest earned

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Growth from investment returns before it runs out.

Number of withdrawals

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How many payments you can take.

Final balance (approx.)

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Balance right before or at depletion.

Spending vs principal and interest

Enter your starting balance, withdrawal amount, return rate and frequency to see how long your money might last.

Starting balance: —
Total withdrawn: —
Share of withdrawals funded by interest: —

Principal vs interest funding

Principal used — 100%
Interest used — 0%

Balance over time with regular withdrawals

Projected account balance

How the “how long will my money last” calculator works

This calculator models a simple drawdown scenario: you have a lump sum invested, it earns a steady rate of return, and you withdraw the same amount on a regular schedule until the money is gone.

Each period the calculator applies this sequence:

Start from the current balance.
Add investment return for the period.
Subtract your fixed withdrawal.
Repeat until the balance reaches zero.

Mathematically, this is similar to a loan being paid down in reverse. Instead of making payments to a lender, you are “paying yourself” from your own portfolio.

Approximate formula (level withdrawals with constant return)

When your withdrawal amount is fixed and the return rate is constant, the approximate number of withdrawals n needed to deplete a balance P with periodic return r and withdrawal W is based on:

Balance after n withdrawals =
    P × (1 + r)ⁿ − W × ((1 + r)ⁿ − 1) / r

Setting this balance to zero and solving for n gives the depletion time. In practice, the calculator uses a step-by-step simulation to handle edge cases like zero or negative returns and to align with whole withdrawals.

Example: living off a portfolio in early retirement

Imagine you have $500,000 invested, expect an average 5% annual return, and plan to withdraw $2,500 per month.

Starting balance = 500,000
Withdrawal = 2,500 monthly
Annual return = 5% (about 0.4167% per month)

Plugging these figures into the calculator might show that your money could last around 25–30 years, with a significant share of your spending funded by investment growth rather than just running down principal.

Small changes can have a large impact. Increasing withdrawals, lowering the return assumption, or starting with a smaller balance will all shorten the projected lifespan of your money.

When the calculator says your money may never run out

If your withdrawal amount is low relative to your portfolio and expected return, the calculator may report that your balance appears sustainable. In simple terms, your investment return each period is larger than your withdrawal, so the pot grows over time instead of shrinking.

This is the idea behind safe withdrawal rules in retirement planning. However, in the real world, market returns are volatile and not guaranteed, so it’s wise to be conservative and review your plan regularly.

Key assumptions and limitations

Constant return. The model assumes a smooth average return each period, not the ups and downs of actual markets.
Fixed withdrawals. Your withdrawal amount is assumed to stay the same in nominal terms and does not adjust for inflation in this version.
No extra deposits. The calculator does not account for additional contributions or one-off top-ups.
No taxes or fees. Any taxes or investment fees are assumed to be already baked into your chosen return rate.

Practical ways to use this calculator

Retirement income planning. See whether your desired lifestyle is likely to be supported by your savings and for how long.
Career break or sabbatical. Estimate how long you can go without a paycheck while drawing down savings.
Bridge to a pension or social benefit. Plan how far your investments can carry you until another income source kicks in.
Spending down windfalls. Model a safe way to use an inheritance, bonus or business sale proceeds over time.

Frequently asked questions

Does this show an exact depletion date?

No. It provides an estimate based on constant returns and fixed withdrawals. Real-world investment performance will vary, so you should treat the result as a planning guide rather than a guarantee.

Can I enter a negative return rate?

Yes. A negative rate simply accelerates how quickly the pot runs out, which can be useful to stress-test your plan for bad market conditions.

What if I plan to increase withdrawals with inflation?

This version does not model inflation-linked withdrawals. One way to approximate it is to reduce your assumed return by your inflation expectation, and treat the withdrawal amount as a “today’s money” value.

How do I use this with a safe withdrawal rule?

You can plug in a withdrawal equal to a chosen percentage of your starting balance (for example, 4% per year) and then see roughly how long the money might last under your return assumption.