How Long Will My Money Last in Retirement?
The answer depends on three factors: how much you have saved, how much you withdraw each month, and how your remaining balance grows (or shrinks) through investment returns. Inflation adds a fourth factor — your expenses increase over time, so a fixed withdrawal amount buys less each year.
The 4% Rule Explained
The 4% rule (from the Trinity Study) says you can withdraw 4% of your portfolio in the first year of retirement, then adjust that amount for inflation each year, and your money should last at least 30 years. On a $500,000 portfolio, that's $20,000/year ($1,667/month) in the first year.
The 4% rule assumes a 50/50 stock/bond allocation. More aggressive portfolios (70/30 stocks/bonds) may support a slightly higher withdrawal rate. More conservative portfolios may require 3.5% or lower.
Factors That Make Your Money Last Longer
- Lower withdrawal rate: 3-3.5% is more conservative and handles market downturns better
- Higher investment returns: Keeping a portion in stocks provides growth that outpaces inflation
- Social Security income: Reduces how much you need from savings (delays = higher benefit)
- Part-time work: Even $1,000/month from part-time work dramatically extends savings
- Flexible spending: Reducing withdrawals during market downturns prevents selling at lows
Factors That Drain Your Money Faster
- Healthcare costs: Average retired couple needs $315,000 for healthcare in retirement (Fidelity, 2025)
- Inflation: At 3% inflation, $3,000/month of expenses becomes $4,000/month in 10 years
- Sequence of returns risk: A bear market in early retirement years is devastating — you sell more shares at lower prices
- Long-term care: Average nursing home cost is $9,000-$10,000/month
- Helping family: Financial support for adult children or aging parents
How to Make Your Money Last Longer
If the calculator shows your money running out too soon, you have four options: save more before retiring (use our Retirement Calculator), reduce planned spending, delay retirement by a few years (each year adds more savings AND reduces withdrawal years), or plan to work part-time in early retirement.