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How long will my retirement savings last?

Use this calculator to see how long your retirement savings will last. This is based on your retirement savings and your inflation adjusted withdrawals.

How long will my retirement savings last? Definitions

What you've saved for retirement
Enter how much money you've saved for retirement. Include 401(k)s, IRAs, annuities, portfolio assets and cash values of your life insurance policies, etc. Do not count any investments that are not earmarked for retirement. Do not count any expected return-on-investment (ROIs) between now and retirement; Do not count any expected inheritance(s). Then, add to this number how much you can realistically save between now and your retirement date, and any estimated net after-tax dollars you expect to receive from the sale of a business, real estate or any item of value that you plan to sell at-or-near your retirement date. Use very conservative after-tax estimates calculated using today's values, not anticipated future values. Again, do not count any expected ROIs between now and retirement. Why? Because we assume that your net ROI will equal the rate of inflation.
Annual spending in retirement
If you were to retire today, how much money on an annual basis before-taxes in today's dollars would you need to live comfortably? Use very conservative before-tax figures in today's dollars, not anticipated future dollars. You can subtract from this number any "guaranteed" lifetime income from Social Security, pensions, rents and other sources. Do not underestimate today's cost-of-living expenses and taxation. Leave some room for emergencies. It's always better to overestimate expenses today than face a cash-flow shortage in retirement.
Average net return-on-investment (ROI)
The estimated net average annual return-on-investment expressed as a percent that you expect to receive after taxes and fees but excluding inflation. The actual ROI is largely dependent on the type of investments you select. The S&P 500 for the ten years ending on December 31st, 2011 had an annual ROI of 2.92%, including reinvestment of dividends. From January 1970 through the end of 2011, the average annual ROI for the S&P 500, including reinvestment of dividends, was approximately 10.01% (source: www.standardandpoors.com). Since 1970, the highest 12-month ROI was 61% (June 1982 through June 1983). The lowest 12-month ROI was -43% (March 2008 to March 2009).

It is important to remember that these scenarios are hypothetical and that future ROI can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual ROI can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.

Average inflation rate
This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2015 the CPI has a long-term average of 2.9% annually. Over the last 40 years highest CPI recorded was 13.5% in 1980. For 2015, the last full year available, the CPI was 0.0% annually as reported by the Minneapolis Federal Reserve.

The Consumer Price Index (CPI) is believed to underestimate the real rate of inflation (CNNMoney). We suggest you use a higher inflation rate than the CPI.

As an additional precaution, we recommend that you input the same percentage in the "Average net return-on-investment (ROI)" and "Average inflation rate". For example if you use 5% for "Average net return-on-investment (ROI)" then use 5% for "Average inflation rate".

Our calculator will increase your distribution amount at the end of each year by the rate of inflation. This begins at the end of the first year of distributions. This helps illustrate the cost of providing a current amount of purchasing power throughout your distributions.