To find out how long your money will last in retirement, divide your savings by what you withdraw each year for a rough answer, then use the how long will my money last in retirement calculator below to add investment returns and inflation. With $500,000 and $3,000 a month, the money lasts about 15 years and 8 months. Cut spending to $2,000 a month and it lasts about 25 years.
Nearly ten extra years from one monthly number. That's why where you live matters so much. Below I explain what the calculator does, where it can mislead you, and how a lower-cost place changes your result.
How long will my money last in retirement calculator
How the calculator works
The math is simple on purpose, so you can check it. Each month the tool takes your withdrawal out of the balance, then adds one month of growth on what is left. Once a year it raises the withdrawal by your inflation rate. It repeats that until the balance cannot cover a withdrawal or 40 years pass, and it reports the last full month the money held out.
Three choices shape the answer more than anything else.
- Withdrawal. The monthly amount you take from savings, after Social Security and any pension. In spending mode the tool subtracts income from spending for you.
- Return. The default is 4 percent a year. That is cautious for a portfolio with some stocks and generous for cash. It is a starting point, not a prediction.
- Inflation. The default is 2.5 percent. The Federal Reserve's target is 2 percent over the longer run, so 2.5 leaves some cushion.
Try the same savings at 2, 4 and 6 percent. Here is what $500,000 does at different monthly withdrawals, with 2.5 percent inflation (our model, withdrawals at the start of each month):
| Starting withdrawal | 2% return | 4% return | 6% return |
|---|---|---|---|
| $1,500 a month | 26 years 3 months | 36 years | 40+ years |
| $2,000 a month | 20 years | 25 years 1 month | 36 years 5 months |
| $2,500 a month | 16 years 2 months | 19 years 3 months | 24 years 9 months |
| $3,000 a month | 13 years 7 months | 15 years 8 months | 18 years 11 months |
Notice which direction is stronger. Moving from a 2 percent to a 6 percent return adds about five years at $3,000 a month and more than sixteen at $2,000. Cutting the withdrawal by $1,000 a month adds nearly ten years at the middle return. You control spending. You do not control returns.
What the 4 percent rule says
The best-known shortcut is the 4 percent rule. It comes from a 1994 study by planner William Bengen, who tested historical market data and found that a retiree who withdrew 4 percent of the starting portfolio in year one, then raised the dollar amount each year with inflation, would not have run out of money in 30 years in any period he checked.
Morningstar updates a version of this every year. Its 2026 base case is 3.9 percent, for a 30-year retirement with a 90 percent chance of success, a portfolio of 30 to 50 percent stocks, and spending adjusted for inflation. On $500,000 that is about $19,500 in year one, or roughly $1,600 a month.
Compare that with the table. At $1,500 a month the calculator's middle case lasts 36 years, which fits. At $3,000 a month, which is a 7.2 percent withdrawal rate, the money lasts under 16 years. Rules of thumb exist because the arithmetic punishes high withdrawal rates quickly.
Sequence-of-returns risk: why average returns mislead
The calculator uses one steady return every year. Real markets do not. What matters is the order of the good and bad years, because you are selling shares while prices are down.
Here is a test. Take ten yearly returns: a 20 percent loss, a 10 percent loss, a 5 percent gain, then seven years of 8 percent. Start with $500,000 and withdraw $2,500 a month, rising 2.5 percent a year. After ten years the balance is about $175,000. Now run the same ten returns in reverse, with the losses last. The balance after ten years is about $335,000. Same returns, same withdrawals, and a $160,000 difference, all from timing.
The early years hurt because every withdrawal during a drop sells at a low price, and those shares are not there when the market recovers. Common ways retirees guard against it:
- Keep one to two years of withdrawals in cash or short-term bonds so a bad year does not force stock sales.
- Cut spending a little after a down year, then restore it. Morningstar's work finds that flexible spending allows a higher starting withdrawal than a fixed amount.
- Hold off on big discretionary spending in the first few years.
- Delay Social Security if you can afford to, which raises the guaranteed income that does not depend on markets.
Try the calculator with a 1 or 2 percent return for a quick stress test. If you are still fine, an early downturn is less scary.
How moving somewhere cheaper stretches the years
Take two retirees with the same $500,000 and the same 4 percent return and 2.5 percent inflation. The first spends $3,000 a month, all from savings. The second lives in a lower-cost place and spends $2,000 a month.
| Spends $3,000 a month | Spends $2,000 a month | |
|---|---|---|
| Savings | $500,000 | $500,000 |
| Yearly withdrawal, year one | $36,000 (7.2%) | $24,000 (4.8%) |
| Money lasts | about 15 years 8 months | about 25 years 1 month |
| Balance at start of year 11 | about $249,000 | about $413,000 |
The $1,000 difference buys 9 years and 5 months. It works twice: you take less out each month, and the money you leave behind keeps compounding. Add a modest Social Security check and the gap widens. If $1,500 of the $2,000 comes from benefits, the withdrawal falls to $500 a month, and the money lasts well beyond 40 years.
A move is not the only way to cut costs, but housing is usually the largest bill, and it is where places differ most. The cheapest states to retire in have housing price indexes 20 to 35 percent below the national benchmark, and our guide to the cheapest places to retire in the US goes down to the city level. Overseas, the gap can be bigger still, which we cover in cheapest places to retire abroad. Before you trust any move, do the work of finding your own numbers with the retirement budget worksheet.
What to do if the answer is too short
If the calculator says 14 years and you need 30, there are four levers, in rough order of impact.
- Lower the withdrawal. Trim housing first, since it is the biggest line. At $500,000 and a 4 percent return, trimming $3,000 to $2,700 a month adds two years.
- Raise guaranteed income. Social Security, a pension or part-time work shrinks what you take from savings. Use spending mode to see the effect.
- Work or save longer. More years of saving and fewer years of withdrawing helps from both ends.
- Adjust the return only with care. Raising the return assumption makes the answer look better without changing anything real.
To work out the savings target in the first place, see how much money you need to retire.
What this calculator leaves out
It is a simple model, and the gaps are worth naming.
- Taxes. Withdrawals from traditional IRAs and 401(k)s are taxed as income. Roth withdrawals mostly are not. The tool does not know which you have, so enter a withdrawal that covers your tax bill.
- Fees. A 1 percent fund fee is a 1 percent lower return. Use your return after fees.
- Health care. Costs often rise faster than general inflation, and a long-term care event can be a one-time hit of tens of thousands of dollars. Plan for it separately.
- Uneven spending. Many retirees spend more early and less later, which the steady-growth model does not capture.
- Required distributions. Tax rules require withdrawals from most pre-tax accounts in your 70s, whether you need the money or not.
- Taking Social Security later. The tool treats your income as steady. If benefits start in a few years, run two scenarios: one before benefits and one after.
This guide is general information and not financial, tax or legal advice. A fee-only planner, paid by you and not by commissions, can run your accounts, taxes and timing through a proper model, including thousands of simulated market paths instead of one steady line.