Will My Money Last?: worked examples

1. $1,500,000 at 62, spending $90,000 a year rising 3 percent with inflation and earning 5 percent, with no outside income, runs short at 81. The sustainable spending is about $59,528 a year.
2. The same plan with $40,000 a year of Social Security from 67 lasts through 95 with about $249,836 left; the sustainable spending rises to about $91,887.
3. Drop the return from 5 to 3 percent and the same plan runs short at 87. Two points of return over thirty years is the difference between a margin and a shortfall.
4. The first-year withdrawal rate is spending less outside income, over the balance. The old rule of thumb that 4 percent lasts thirty years came from historical sequences of real returns, which this calculator does not model; a fixed return flatters a plan.
5. Spending that falls with age, taxes on withdrawals, and a late long-term care bill all change the answer, and none is in the tool. It answers one narrow question well: at these assumptions, when does the money run out?

Educational only, not investment, tax, or legal advice. Results are hypothetical estimates that vary with each use and over time and are not guaranteed accurate or complete. Using this tool creates no client relationship with Considerate Capital, and the site that linked here is not affiliated with it. By using it you agree to the tool terms.