The wrong question, and the right one
Most retirement calculators answer "what will my balance be in 20 years?" That is a comfortable question with a large, encouraging number for an answer. The question people actually lose sleep over is harsher: when does it run out? This one answers that, and gives you a month.
The difference matters because the two questions have different failure modes. A projected balance can look healthy right up to the point it does not. A depletion date is either before or after you need it to be, and there is no ambiguity about which.
The inflation error that flatters every projection
Here is the assumption buried in most withdrawal calculators: your monthly withdrawal stays the same forever. It is easier to model, and it makes the results look considerably better.
It also cannot be true. At 3% inflation:
| Year | To buy what $4,000 buys today |
|---|---|
| Today | $4,000 |
| 10 | $5,375 |
| 20 | $7,224 |
| 30 | $9,709 |
A calculator that withdraws a flat $4,000 for thirty years is modelling a retirement in which you gradually become poorer, ending on about 40% of the spending power you started with. This calculator raises the withdrawal every year instead, which is why its answer is shorter and more useful. The inflation calculator shows the same effect on any figure you like.
Your withdrawal rate matters more than your balance
People obsess over the size of the pot. The pot is only half of it, the ratio between what you take and what you have is what determines survival, and it is the number this calculator puts front and centre.
| Annual withdrawal | Roughly what happens |
|---|---|
| 3% or less | The pot usually grows. Very likely to outlive you. |
| 4% | The classic rule. Historically survived 30 years in most periods. |
| 5% | Works if returns cooperate. Uncomfortably dependent on them. |
| 6% or more | Usually depletes within 20–25 years. |
Two people with $500,000 and $2,000,000 are in identical positions if one withdraws $20,000 a year and the other $80,000. The absolute figure tells you about lifestyle; the rate tells you about survival.
What to do with a result you do not like
There are only four levers, and it is worth knowing their relative power. Withdrawing less is by far the strongest, cutting the withdrawal 10% typically extends the pot by several years, because the saving compounds. Retiring later works twice over: more years of contributions, fewer of withdrawal. Saving more now helps in proportion to how long it has to compound, so it is powerful at 40 and marginal at 62. And taking more risk is the lever people reach for first and should reach for last, because the sequence-of-returns problem means a bad first five years in retirement does damage that a good average cannot undo.
If you are still building the pot, the compound interest calculator shows what regular contributions become, and the SIP calculator works backwards from a target.
What this model does not do
It assumes a steady return every month, which no market provides. It ignores tax, which varies enormously by country and account type. It does not model a pension starting partway through, a lump-sum expense, or the well-documented tendency of real retirement spending to fall in the later years. It cannot know how long you will live.
What it does do is stop the two errors that make most projections useless: pretending spending never rises, and answering a question about balances when you asked a question about time. Run it with an honest return assumption and an honest withdrawal, and the date it gives you is worth taking seriously.