How Long Will My Money Last?

Three factors primarily determine how long a savings portfolio will last: your annual withdrawal amount, your investment return rate, and the number of years the money needs to sustain you. Increasing your withdrawal rate depletes a portfolio faster; higher investment returns (net of fees) slow the depletion; and a longer retirement period requires either more savings or a lower withdrawal rate at the outset.

Inflation is also a critical factor. Even modest inflation can significantly erode the purchasing power of a fixed withdrawal amount over a 20- or 30-year retirement. A withdrawal that feels comfortable today may cover fewer expenses in 15 years if the cost of goods and services has risen. This is why many retirement planning approaches incorporate cost-of-living adjustments into withdrawal estimates. Understanding how starting age affects compound interest makes clear why saving earlier produces a larger portfolio — and a more forgiving withdrawal rate — in retirement.

One widely referenced starting point in retirement income planning is the 4% withdrawal guideline — sometimes called the "4% rule." Research originating in financial planning literature suggested that withdrawing approximately 4% of a balanced portfolio's value in the first year of retirement, and then adjusting that amount annually for inflation, has historically had a high probability of sustaining a 30-year retirement for diversified portfolios.

Using this guideline, a $500,000 portfolio might sustain a first-year withdrawal of approximately $20,000, while a $1,000,000 portfolio might sustain $40,000. Importantly, this guideline is based on historical market returns and does not guarantee any specific outcome — actual results will vary based on market performance, your specific portfolio allocation, fees, and the timing of withdrawals relative to market cycles. Use the retirement withdrawal calculator to model your own projections. Consult a qualified financial advisor to determine a withdrawal rate appropriate for your specific situation.

A straightforward way to estimate portfolio longevity is to divide your total savings by your annual withdrawal amount — this gives you a rough estimate in years assuming zero investment return. For example, $300,000 in savings with a $20,000 annual withdrawal would last approximately 15 years with no growth. In practice, investment returns may extend this timeline, while inflation and unexpected expenses may shorten it.

Online retirement calculators — including the free tools available at SEC Investor.gov — can model multiple scenarios based on different withdrawal rates, return assumptions, and time horizons. These tools are useful for estimating ranges, but they should be treated as estimates, not predictions. Work with a qualified financial planner for a comprehensive analysis of your specific circumstances. Understanding how planning helps you build wealth over time is the first step toward a realistic retirement timeline.

Several strategies may help extend how long your savings last in retirement:

• Reduce your withdrawal rate early: Withdrawing less in the early years of retirement gives the portfolio more time to grow and reduces the risk of depleting it prematurely.
• Delay Social Security benefits: Delaying Social Security benefits past your full retirement age (up to age 70) may increase your monthly benefit, reducing how much you need to withdraw from personal savings.
• Maintain a diversified portfolio: A mix of growth and income assets, appropriate to your age and risk tolerance, may provide more sustainable income than holding only cash or bonds. Consider investing in the S&P 500 as a core growth component.
• Maximize tax-advantaged accounts: Contributing to Roth IRAs before retirement means withdrawals in retirement are generally tax-free, preserving more purchasing power per dollar withdrawn.
• Control spending and adjust withdrawals: Reducing withdrawals during market downturns — a strategy sometimes called dynamic withdrawal — may help prevent permanent portfolio damage during adverse conditions.

Social Security retirement benefits may significantly extend how long your personal savings last by providing a guaranteed income stream that continues for life regardless of market conditions. The Social Security Administration provides tools at ssa.gov to estimate your expected benefit based on your earnings record. The longer you delay claiming benefits — up to age 70 — the higher your monthly benefit may be.

Other income sources that may supplement personal savings include pensions, rental income, part-time work, and annuities. The combination of guaranteed income sources (Social Security, pension, annuity) and portfolio withdrawals is a common framework for structuring retirement income. Reducing your dependence on portfolio withdrawals by maximizing guaranteed income typically reduces the risk of outliving your savings. For additional income in retirement, explore strategies to make more money through passive and active income streams. If rental property is part of your income plan, learning how to minimize taxes on rental income can meaningfully increase the after-tax cash flow that supplements your savings. You may also consider high-paying side hustles to build a supplemental income stream during your working years that reduces how much you need to draw from your portfolio in retirement.