Savings Longevity & Depletion Calculator
Calculate how many years your savings or retirement nest egg will last under monthly withdrawals and compounding returns.
How to Use the Savings Longevity & Depletion Calculator
Planning the decumulation phase of retirement requires understanding the delicate mathematical balance between portfolio yield and withdrawal velocity. The famous Trinity Study established the ‘4% Rule,’ which demonstrates that withdrawing 4% of your initial portfolio value annually (adjusted for inflation) offers a 95% historical probability of surviving 30 years.
Formula and Calculation Methodology
- Balance_m: Remaining portfolio principal at month m
- r: Annualized investment portfolio return rate
- Withdrawal_m: Monthly cash drawdown adjusted annually for inflation
When withdrawals exceed 6% to 7% annually, sequence of returns risk escalates dramatically. If the market suffers an early downturn while you are liquidating shares to meet living expenses, portfolio capital is destroyed permanently. Our decumulation engine factors in ongoing compound returns, inflation adjustments, and capital longevity.
Years of Longevity for a $500,000 Portfolio (at 5.0% Return)
| Monthly Withdrawal | Annual Drawdown Rate | 2.5% Inflation Adjusted | Zero Inflation |
|---|---|---|---|
| $2,000 / mo ($24k/yr) | 4.8% of initial | 32 Years 4 Months | 41 Years 8 Months |
| $2,500 / mo ($30k/yr) | 6.0% of initial | 21 Years 2 Months | 26 Years 1 Month |
| $3,000 / mo ($36k/yr) | 7.2% of initial | 15 Years 9 Months | 18 Years 6 Months |
| $3,500 / mo ($42k/yr) | 8.4% of initial | 12 Years 3 Months | 14 Years 0 Months |
| $4,000 / mo ($48k/yr) | 9.6% of initial | 10 Years 1 Month | 11 Years 3 Months |
Frequently Asked Questions
What is the 4% safe withdrawal rule?
The 4% rule suggests you can safely withdraw 4% of your retirement portfolio in year one, and increase that dollar amount by inflation each subsequent year without running out of money over 30 years.
What is Sequence of Returns Risk?
Sequence of returns risk refers to the danger of experiencing market losses in the first few years of retirement while taking withdrawals, which depletes principal much faster than if the losses occurred later.
How does inflation impact retirement longevity?
Even a modest 2.5% inflation rate doubles your required living expenses over 28 years, cutting your capital longevity in half if your returns don’t keep pace.