The answer depends on balance, withdrawals, returns and inflation. Here is the model, with a worked example you can test.
Updated November 2026
The question
How long will a pot of savings last if you take money out every year and raise the withdrawals with inflation? The answer depends on four things: the starting balance, the first withdrawal, the return you earn and inflation. The retirement withdrawal calculator runs this projection for your numbers.
How the projection works
Each year, in order: take the year’s withdrawal from the balance, apply the investment return to what is left, then raise next year’s withdrawal by inflation. The balance is exhausted when it can no longer cover a full withdrawal.
Balance after year t = (Balance – Withdrawal) x (1 + return)
Worked example
Savings of $800,000, a first withdrawal of $40,000 (a 5 percent withdrawal rate), a 5 percent return and 2.5 percent inflation. Year 1: withdraw $40,000, leaving $760,000, which grows to $798,000. Year 2: withdraw $41,000, leaving $757,000, which grows to $794,850. The balance slowly declines as withdrawals rise. Following the full projection, the savings last 26 years.
Test the sensitivities
| Scenario | Years the money lasts |
|---|---|
| Base: $40,000 first withdrawal, 5% return, 2.5% inflation | 26 |
| Lower withdrawal: $32,000 | 37 |
| No inflation adjustment | 60+ |
A modest cut in the first withdrawal extends the life of the money dramatically, which is why many people stay flexible in down markets.
Excel version
Make a table with columns for year, starting balance, withdrawal, balance after withdrawal and ending balance. Withdrawal: =40000*(1+0.025)^(A2-1). Ending balance: =(B2-C2)*(1+0.05). Copy the rows down until the balance goes negative. For a level payment from a lump sum, use =PMT(rate,years,-balance) as in the PMT function.
What the model leaves out
- Returns vary. A bad market early in retirement hurts far more than the average suggests.
- Taxes, Social Security, pensions and other income.
- Changing spending needs, such as health care costs.
This is a simple illustration and not a retirement plan. Consider talking to a licensed financial advisor. Estimate the savings side with the 401k savings calculator and compare with an annuity.
Frequently asked questions
How long will $800,000 last in retirement?
With a $40,000 first-year withdrawal, 5 percent return and 2.5 percent inflation it lasts 26 years in this model.
What is a withdrawal rate?
The first-year withdrawal divided by the starting balance.
Is there a safe withdrawal rate?
No single number is safe in every case. It depends on returns, time horizon and flexibility.
Does the calculator include taxes?
No. Taxes and other income are not modeled.