Will my savings last in retirement? Years by withdrawal rate
Mostly it comes down to two numbers: how much you take out each year as a share of what you started with, and what the money earns after inflation.
Here's a made-up example. You have a $1,000,000 portfolio. You take out $40,000 in the first year, then the same buying power every year after, so the dollar amount rises with inflation. If the portfolio earns 2% a year above inflation, the money lasts about 35 years. If it earns 4% above inflation, it never runs out. If it only keeps pace with inflation, it lasts exactly 25.
Every figure on this page is a synthetic example, picked so you can check the math yourself. This page is for planning and education. It isn't financial advice.
How long a balance lasts at a given withdrawal rate
The table uses the same example $1,000,000 starting balance. The withdrawal rate is the first year's withdrawal as a share of that balance, so 4% means $40,000. Each withdrawal comes out at the end of the year and stays the same in today's dollars, which is the same thing as raising it with inflation. Returns are real (after inflation) and identical every year. No taxes, no fees.
| Withdrawal rate | First-year withdrawal | 0% real return | 2% real return | 4% real return |
|---|---|---|---|---|
| 3% | $30,000 | 33.3 years | 55.5 years | Never (it grows) |
| 3.5% | $35,000 | 28.6 years | 42.8 years | Never (it grows) |
| 4% | $40,000 | 25.0 years | 35.0 years | Never (holds at $1,000,000) |
| 5% | $50,000 | 20.0 years | 25.8 years | 41.0 years |
| 6% | $60,000 | 16.7 years | 20.5 years | 28.0 years |
To check a row, or try your own example:
years = -ln(1 - r × B ÷ W) ÷ ln(1 + r)
Here B is the starting balance, W is the yearly withdrawal in today's dollars and r is the real return. At a 0% real return it's just B ÷ W. And when r × B is at least W, the growth covers the withdrawal and the balance never falls.
Two things jump out. Going from 0% to 2% real adds ten years at a 4% withdrawal. And small cuts at the low end buy a lot: dropping from 4% to 3.5% at 2% real adds almost eight years.
Real return is where people trip. A 7% nominal return (before inflation) in a year with 3% inflation is about 3.9% real (1.07 ÷ 1.03 = 1.0388). If you put 7% nominal into a calculator that also holds your withdrawals flat in dollars, you've quietly assumed inflation is zero, and the answer comes out far too rosy. If your 7% is already the after-inflation figure people usually quote, don't subtract inflation again.
Why a flat return hides sequence risk
Every number in that table assumes the same return every year. Markets don't work like that. Before you start withdrawing, the order of good and bad years doesn't matter: -20%, then +5%, then +20% leaves you in the same place as +20%, +5%, -20%, because both multiply out to 1.008.
Once you're withdrawing, the order costs real money. Here are two synthetic retirees with the same $1,000,000, the same $40,000 a year taken at the end of each year, and the same three real returns in opposite order.
| Year | Bad year first | Good year first |
|---|---|---|
| Start | $1,000,000 | $1,000,000 |
| Year 1 (-20% / +20%) | $760,000 | $1,160,000 |
| Year 2 (+5% / +5%) | $758,000 | $1,178,000 |
| Year 3 (+20% / -20%) | $869,600 | $902,400 |
The retiree who got the bad year first ends up $32,800 behind with exactly the same returns. They sold $40,000 of investments near the bottom, and those shares weren't around for the recovery. If both portfolios then earn a flat 2% real from year 4 on, the first runs out after about 31.8 years in total and the second after about 33.3.
That's a year and a half lost to one bad year.
A run of weak years right at the start does far more damage, and no flat-rate table can show it. A flat 3.5% or 4% is a fine first sketch. It's not a stress test.
What the 4% rule actually claims
The 4% rule comes from William Bengen's 1994 study of historical US stock and bond returns. He found that a retiree who withdrew 4% of the portfolio in the first year, then raised that dollar amount with inflation every year, wouldn't have run out of money within 30 years in any of the historical periods he tested, with roughly half to three quarters of the portfolio in stocks.
Read that closely. It's the worst case from the past, so in most of the periods he tested the money lasted well beyond 30 years. It isn't a forecast. It's US markets only. It assumes a fixed, inflation-adjusted withdrawal with no fees or taxes. And it covers 30 years, not a lifetime.
The 30-year part is what early retirees skip. On the table above, 4% at 2% real lasts about 35 years. Retire at 65 and that runs to 100. Retire at 42 and it runs out at 77.
People often ask whether a seven-figure portfolio is enough to retire at 30. At that age, the plan has to run 60 years or more, twice the span the 4% rule was tested over. Even a 3% withdrawal at 2% real runs out after about 55 years.
Pensions and Social Security change the shape
Most people don't live off a portfolio alone for their whole retirement. A common setup: someone ready to stop working at 42, with a pension starting at 62 and Social Security at 70, who's sized the whole plan on a flat 3.5% withdrawal rate.
A single flat rate misses how that plan really works. The portfolio pays for everything in the 20 bridge years before the pension, then withdrawals drop at 62, and drop again at 70. So the heaviest withdrawals come first, which is exactly when a bad sequence of returns hurts most. It's really two or three plans stacked end to end, and the bridge is the part to stress.
What Simura's drawdown scenario does, and what it doesn't
A budgeting app that only tracks past transactions can't answer this question at all, because it's a question about the future. Simura's Retirement drawdown scenario asks the same thing as this page: will my savings last? You give it a starting balance (or link accounts and it adds them up), your monthly after-tax spending in retirement, your age, an expected return before inflation and an inflation rate.
It raises your spending with inflation every year, grosses up withdrawals for tax on Traditional (pre-tax) balances, and tells you the age your money runs out, or that it lasts past a 50-year horizon. It also shows your first-year withdrawal rate next to the 4% rule. With linked accounts, each one compounds at its own rate instead of one blended number. The app compounds monthly and raises spending once a year, so its answers won't match the table above to the decimal.
It has two limits you should know about. The app's drawdown scenario doesn't model Social Security or pensions today. If your plan leans on either, what you'll see is the portfolio carrying all of your spending alone, from the first month to the last. For the 42-year-old above, that's a pessimistic answer, not the real one. And like the table on this page, it assumes a steady average return, so it won't show you sequence risk.
Where it helps is the part a static table can't do. It runs your own balances and spending, and when you change one input (spend $500 a month less, or assume a lower return) you see the run-out age move. Here's how Simura's simulator projects your accounts forward.