The simplest version of the question is division: savings balance divided by monthly spending. Real planning becomes more complicated when the balance earns a return, withdrawals rise, taxes or fees apply, or invested money moves up and down while withdrawals continue.
The How Long Will My Savings Last? Calculator models a recurring monthly withdrawal, an optional annual return, an annual change in the withdrawal amount, and a target duration.
The short answer
A balance lasts longer when withdrawals are smaller, money earns more while it remains in the account, or spending declines. It lasts for less time when withdrawals are larger, expenses rise, returns are lower, fees or taxes reduce the balance, or investment losses occur while money is being withdrawn.
Use the result as a scenario, not a promise. A bank yield can change. Investment returns fluctuate. Spending rarely follows one perfectly smooth path for decades.
Start with the no-growth math
When savings earn 0% and the withdrawal never changes, the basic calculation is:
Months savings lasts =
starting balance ÷ monthly withdrawal
A $150,000 balance supporting $2,500 per month with no growth lasts 60 months, or exactly five years.
That simple calculation is useful because it separates the spending decision from return assumptions. If the plan does not work at 0%, the return entered later is doing meaningful work in the projection.
How return changes the estimate
Money that remains in the account can continue earning a return. In Sunset Guardian's calculator, the annual return is converted to an equivalent monthly rate. Growth is applied first and the withdrawal occurs at month-end.
Using the same $150,000 balance and $2,500 monthly withdrawal, a constant 4% annual return with no increase in withdrawals extends the modeled duration from 60 months to about 67 months.
The Department of Labor notes that money being withdrawn during retirement may still need to grow and that inflation remains a consideration. Investor.gov also emphasizes that every saving and investment product has a different mix of risk, return, liquidity, and safety.
How rising withdrawals change it
A fixed $2,500 monthly withdrawal does not buy the same amount forever when living costs rise. The calculator therefore has an annual withdrawal-change field.
With a 2.5% annual increase:
- Months 1 through 12: $2,500 per month
- Months 13 through 24: $2,562.50 per month
- Months 25 through 36: about $2,626.56 per month
The annual change can also be set to 0% for level withdrawals or entered as a negative percentage when the plan deliberately reduces spending over time.
The Department of Labor's retirement-planning material highlights inflation because future dollars may buy less than today's dollars. The withdrawal-change input lets the user stress-test that problem without pretending to forecast the actual future inflation rate.
A complete example
Consider these assumptions:
- Starting savings: $150,000
- Starting monthly withdrawal: $2,500
- Annual return: 4%
- Annual withdrawal increase: 2.5%
- Comparison target: 5 years
Under Sunset Guardian's smooth monthly model, the balance lasts about 5 years 4 months.
By the time the modeled balance reaches zero:
- Total withdrawals are about $166,656.
- Modeled growth during the drawdown is about $16,656.
After exactly five years, the current plan still has about $8,905 remaining.
The same calculator can work backward from the five-year target. With the 4% return and 2.5% annual withdrawal increase unchanged, the mechanical starting withdrawal that uses the balance by the end of 60 months is about $2,628 per month. By the fifth year, that modeled withdrawal has risen to about $2,901 per month.
That $2,628 figure is a mathematical drawdown result under the entered assumptions. It is not a safe withdrawal rate or a recommendation for retirement spending.
Why a smooth return is only a scenario
The calculator applies the same equivalent monthly return throughout the projection. Real investments do not behave that way.
Investor.gov states that all investments involve risk and specifically describes volatility risk as prices moving up and down. A portfolio can lose money in some periods even when its longer-term average return is positive.
Withdrawals add another complication. If the account suffers a large decline while withdrawals continue, more shares or assets may have to be sold to produce the same cash. A later market recovery then acts on a smaller remaining balance.
Two real portfolios can therefore experience different outcomes even when their long-run average returns eventually look similar. The calculator intentionally does not simulate random market returns or claim to predict that sequence.
Plan backward from a target duration
Sometimes the duration is known before the monthly withdrawal. Examples include:
- A one-year career break
- Three years before a pension begins
- A five-year bridge before another income source starts
- A temporary period of reduced employment
Enter the target years and months and the calculator solves for an initial monthly withdrawal that mathematically uses the balance by the end of that period under the same return and annual withdrawal-change assumptions.
That output is useful for comparison. It does not leave a safety margin for unexpected expenses, lower returns, taxes, or a longer-than-planned time horizon unless those risks are included separately.
Cash savings and invested savings behave differently
A savings account can provide stable access and deposit protection when the account is eligible for federal deposit insurance, but the interest rate can change and inflation can reduce purchasing power.
Investor.gov describes cash and cash equivalents as generally safer than stocks but warns that inflation can erode their real return. Investments may offer more growth potential while also exposing the balance to market losses and volatility.
Match the return assumption to the type of money being modeled. A bank savings yield and an expected investment return are not interchangeable simply because both can be entered as a percentage.
Retirement has additional moving parts
A savings-duration estimate can be one piece of retirement planning, but it is not a complete retirement-income plan. The Consumer Financial Protection Bureau notes that retirement decisions also involve Social Security, pensions, debt, assets, and other income choices.
Retirement accounts can also have tax rules, required distributions, or penalties that are not included in this calculator. Health costs, long-term care, housing changes, and survivor needs can alter spending.
Use the calculator to understand the drawdown mechanics, then evaluate the other income sources and account rules separately.
How to use the calculator
Starting savings balance
Enter only the balance available for the withdrawal plan. Do not automatically combine accounts with different tax, access, or investment rules.
Starting monthly withdrawal
Use the cash amount expected to leave the modeled balance each month. If taxes must be paid from the same account, consider whether the gross withdrawal needs to be higher than the spending amount.
Annual return or savings yield
Enter 0% for a no-growth comparison. For an investment scenario, test more than one return instead of relying on one optimistic number.
Annual withdrawal change
Use 0% for a fixed withdrawal. A positive percentage models rising withdrawals; a negative percentage models planned reductions.
Target duration
Enter the period the savings are intended to cover. The calculator shows the current plan's balance at that point and a separate starting-withdrawal estimate for the target.
Frequently asked questions
How long will $100,000 last at $3,000 per month?
With 0% growth and a fixed $3,000 withdrawal, simple division gives about 33.3 months. Returns, rising withdrawals, taxes, and fees change the result.
Should I assume an investment return while withdrawing?
You can model one, but treat it as a scenario. Investor.gov notes that investments involve risk and fluctuate in value. Test lower-return cases as well.
Should I increase withdrawals for inflation?
If the goal is to maintain similar purchasing power, a rising withdrawal scenario is useful. Actual inflation varies, so test more than one annual change.
Why does the calculator stop at 100 years?
Very low withdrawals combined with high assumed returns can create a model where the balance does not reach zero. The 100-year limit prevents an endless simulation and should not be interpreted as proof that the money can last forever.
Does the target withdrawal tell me what I can safely spend in retirement?
No. It is a mathematical result under constant-return and withdrawal-change assumptions. It does not model market sequence, taxes, fees, longevity risk, unexpected expenses, or the rest of a retirement-income plan.
Sources and further reading
Test the spending plan against several assumptions
How Long Will My Savings Last? Calculator
Model recurring withdrawals, return, annual spending changes, and a target duration.
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Build a reserve target from essential expenses when the money is intended for unexpected needs rather than a planned drawdown.
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