How long will my money last with systematic withdrawals calculator

Q: What withdrawal rate will last forever?

Also known as the 4% rule, the SWRs recommendation is straightforward: to ensure you have enough to live on for the rest of your life, withdraw no more than 4% of the initial balance of your portfolio every year, adjusted annually for inflation.

Q: How do you calculate how long money will last in Excel?

Here is how you would use the NPER” function in excel to figure out when you would run out of money..

Table of Contents Show

I’m retired, how long will my savings last?
Ways to make your savings last longer
The 4% rule
Dynamic withdrawals
The income floor strategy
Not quite ready to retire?
What withdrawal rate will last forever?
How long will 3 million dollars last to live on?
How long will my money last using the 4 rule?
How do you calculate how long money will last in Excel?

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How Long Will My Money Last With Systematic Withdrawals?

You have worked hard to accumulate your savings. Use this calculator to determine how long those funds will last given regular withdrawals.

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I’m retired, how long will my savings last?

Making your savings last is essential in retirement. Find out how far you can stretch your nest egg if you make regular withdrawals.

Once you hit retirement, the hope is that you will get to kick back and enjoy your hard-earned savings. But you’ll enjoy your downtime a lot more and a lot longer if you manage your withdrawals smartly.

To give yourself the best chance of outliving your money, financial experts recommend you withdraw no more than 4% of your total nest egg every year.

This calculator can help you figure out how long your retirement savings will last with regular withdrawals.

If you find your nest egg isn’t quite large enough to afford those withdrawals, there are still things you can do to stretch the assets you have accumulated. For instance, you might:

Take a full- or part-time job in retirement.
Get money from your home. If you are age 62 or older, you can convert your home equity into tax-free retirement income by taking a reverse mortgage. But make sure you do your research and know the risks first.
Move to a less expensive area.

This information may help you analyze your financial planning needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. This service shall not infer that company assumes any fiduciary duties. In addition, such service should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.

Figuring out how many years your retirement savings will last isn’t an exact science. There are many variables at play — investment returns, inflation, unforeseen expenses — and all of them can dramatically affect the longevity of your savings.

But there’s still value in coming up with an estimate. The simplest way to do this is to weigh your total savings, plus investment returns over time, against your annual expenses.

Try our calculator to get your estimate:

Ways to make your savings last longer

A calculator like the one above can be a helpful guide. But it’s hardly the final word on how far your savings can stretch, particularly if you’re willing to adjust your spending to suit some common retirement withdrawal strategies.

Below are some smart rules of thumb on how to withdraw your retirement savings in a way that gives you the best chance of having your money last as long as you need it to, no matter what the world sends your way.

The 4% rule

The 4% rule is based on research by William Bengen, published in 1994, that found that if you invested at least 50% of your money in stocks and the rest in bonds, you’d have a strong likelihood of being able to withdraw an inflation-adjusted 4% of your nest egg every year for 30 years (and possibly longer, depending on your investment return over that time).

“The 4% rule was the safe withdrawal rate during some of the worst market downturns in history.”

The approach is simple: You take out 4% out of your savings the first year, and each successive year you take out that same dollar amount plus an inflation adjustment.

Bengen tested his theory across some of the worst financial markets in U.S. history, including the Great Depression, and 4% was the safe withdrawal rate.

The 4% rule is simple, and the likelihood of success is strong, as long as your retirement savings are invested at least 50% in stocks. Here’s how to approach investing in stocks.

Dynamic withdrawals

The 4% rule is relatively rigid. The amount you withdraw each year is adjusted by inflation and nothing else, so finance experts have come up with a few methods to increase your odds of success, especially if you’re looking for your money to last a lot longer than 30 years.

These methods are called “dynamic withdrawal strategies.” Generally, all that means is you adjust in response to investment returns, reducing withdrawals in years when investment returns aren’t as high as expected, and — oh, happy day — pulling more money out when market returns allow it.

There are many dynamic withdrawal strategies, with varying degrees of complexity. You might want help from a financial advisor to set one up. (Here’s how to find the best financial advisor for you.)

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The income floor strategy

This strategy helps you preserve your savings for the long haul by making sure you don’t have to sell stocks when the market is down.

“Make sure essential expenses are covered by guaranteed income, like Social Security.”

Here’s how it works: Figure out the total dollar amount you need for essential expenses, like housing and food, and make sure you’ve got those expenses covered by guaranteed income, such as Social Security, plus a bond ladder or an annuity.

A word about annuities: While some are overpriced and risky, using the right annuity can be an effective retirement-income tool — you fork over a lump sum in return for guaranteed payments for life. In the right circumstances, even a reverse mortgage might work to shore up your income floor.

That way, you always know your basics are covered. Then, let your invested savings be responsible for your discretionary expenses. For instance, you'd settle for a staycation when the stock market’s tanking. Which raises the question: Do you still call it a staycation when you’re retired?

Not quite ready to retire?

When you’re on the edge of retirement, you’re bound to wonder how far your existing savings will take you. But if you’re still a few years away from leaving the workforce, using a retirement calculator is a great way to gauge how changes to your savings rate will affect how much you’ll have when you retire. If you could use help with your financial plan, see our best financial advisors list.

What withdrawal rate will last forever?

Also known as the 4% rule, the SWR's recommendation is straightforward: to ensure you have enough to live on for the rest of your life, withdraw no more than 4% of the initial balance of your portfolio every year, adjusted annually for inflation.

How long will 3 million dollars last to live on?

If you retire at age 65 and expect to live to the average life expectancy of 79 years, your three million would need to last for about 14 years. However, if you retire at 55 and expect to live to the average life expectancy, your nest egg would need to last for about 24 years.

How long will my money last using the 4 rule?

It states that you can comfortably withdraw 4% of your savings in your first year of retirement and adjust that amount for inflation for every subsequent year without risking running out of money for at least 30 years.