How does the calculator model withdrawals?
It converts the annual return into a rate per withdrawal period. Each period, the remaining balance earns that rate, and then the withdrawal is taken at the end of the period. This repeats for every period in the years you enter.
If the balance cannot cover a withdrawal, the model takes what is left and stops; the money-lasts result shows when that happens. If the balance survives the whole period, money lasts shows the full term and the ending balance shows what remains.
The worked example uses a monthly rate of the annual return divided by 12. A closed-form version of the same calculation is shown below, which is handy for checking the result by hand.
Balance after N periods = B × (1 + i)^N − W × ((1 + i)^N − 1) ÷ i Balance grows if W < B × i
- B
- starting balance
- W
- withdrawal per period
- i
- return per period (annual return ÷ periods per year)
- N
- number of withdrawals
Example: $150,000 with $1,000 a month for 15 years
Scenario: Pat retires with $150,000 in savings and wants to take $1,000 at the end of each month for 15 years, assuming the remaining balance earns an illustrative 4% a year.
- Monthly rate4% ÷ 12 = 0.3333% (0.0033333)
- First month's earnings$150,000 × 0.0033333 = $500.00, so a $1,000 withdrawal spends $500 of principal
- Growth factor(1 + 0.04 ÷ 12)^180 = 1.82030163
- Balance without withdrawals$150,000 × 1.82030163 = $273,045.24
- Value of the withdrawals$1,000 × (1.82030163 − 1) ÷ (0.04 ÷ 12) = $246,090.49
- Ending balance$273,045.24 − $246,090.49 = $26,954.76 (computed before rounding the two parts)
After 15 years and $180,000 of withdrawals, Pat would still have about $26,954.76 left.
Kept going at the same pace, the balance would run out in month 209, about 17 years and 5 months from the start.
When is a savings withdrawal plan useful?
Planning retirement income from savings
Test how much you can take each month and still have money left at an age you choose. The ending balance tells you how much margin your plan has.
Living on a lump sum for a while
A severance payment, inheritance or sale proceeds can fund a career break or a gap between jobs. The calculator shows how long the money would carry you.
Bridging until other income starts
If a pension or benefit begins in a few years, you can model withdrawals that cover the gap and see what is left when it starts.
Checking a withdrawal against interest
Compare the withdrawal with the balance times the period rate. If it is lower, you are living on earnings; if higher, you are drawing down principal.
What mistakes shorten how long savings last?
Ignoring inflation
A fixed $1,000 a month buys less every year. If you plan to raise withdrawals with prices, the money will run out sooner than this level-withdrawal model shows.
Assuming a steady return
Real returns vary. A large loss in the first years of withdrawals leaves less money to recover, which can shorten the drawdown more than the average return suggests.
Forgetting taxes on withdrawals
Withdrawals from some retirement accounts are taxable income, and interest in ordinary savings is taxed as it is earned. The amount you can spend may be less than each withdrawal.
Planning to the exact dollar
Ending a plan at zero leaves no room for a long life, a big repair or a medical bill. Many people aim to finish the planning period with a cushion.
How much does the withdrawal amount change the outcome?
More than intuition suggests. With $150,000 earning 4%, the balance earns about $500 a month at the start. Withdrawals near that level barely touch principal; withdrawals well above it eat into the balance quickly.
Going from $1,000 to $1,200 a month means the money no longer lasts 15 years; it runs out in month 162. At $1,500 a month it runs out in month 122, just over 10 years.
| Monthly withdrawal | Balance after 15 years | Total withdrawn | Money lasts |
|---|---|---|---|
| $600 | $125,390.95 | $108,000.00 | Full 15 years |
| $800 | $76,172.85 | $144,000.00 | Full 15 years |
| $1,000 | $26,954.76 | $180,000.00 | Full 15 years |
| $1,200 | $0.00 | $194,362.02 | Runs out in month 162 (13 years, 6 months) |
| $1,500 | $0.00 | $182,763.56 | Runs out in month 122 (10 years, 2 months) |
Terms used on this page
- Principal
- Principal is the amount of money you borrow, or the amount you deposit, before any interest. On a loan, it is the balance that interest is charged against, and each payment's non-interest portion reduces it. On savings, principal is your own money, the base on which interest is earned.
- Inflation
- Inflation is the general rise in prices over time, which reduces how much a dollar can buy. In the US it is most often measured by the Consumer Price Index, published monthly by the Bureau of Labor Statistics. When your savings earn less than inflation, their purchasing power shrinks even though the dollar balance grows.
- Compound Interest
- Compound interest is interest earned or charged on both the original principal and the interest that has already built up. Each period's interest is added to the balance, so the next period's interest is a little larger. Over long stretches, compounding makes savings grow faster and unpaid debts grow faster too.
- Real Rate of Return
- The real rate of return is what your money earns after adjusting for inflation. It shows the actual growth in purchasing power rather than in dollars. A quick estimate is the nominal rate minus inflation; the exact figure is (1 + nominal) ÷ (1 + inflation) − 1, which is slightly smaller.
Savings Withdrawal Calculator: common questions
How long will $150,000 last if I withdraw $1,000 a month?
At an illustrative 4% return on the remaining balance, about 17 years and 5 months. With no return at all, it would last exactly 150 months, or 12 years and 6 months. The return stretches the money because the balance keeps earning while you draw it down. Try different rates above, since the answer is sensitive to that assumption.
How much can I withdraw from savings each month without running out?
To never touch principal, withdraw no more than the balance times the monthly return; on $150,000 at 4%, that is about $500 a month. To spend the balance down over a set period instead, raise the withdrawal in the calculator until the ending balance is close to zero at the end of that period, ideally leaving a cushion.
What happens when withdrawals are larger than the interest earned?
The balance shrinks, and it shrinks faster each period because there is less money left to earn interest. That is not necessarily a problem if it is the plan, such as spending savings over retirement, but it means the money has an end date. The money-lasts result shows when that date arrives.
Does it matter if I withdraw at the start or end of each period?
Yes, a little. This calculator takes withdrawals at the end of each period, after that period's growth, which is slightly more favorable than withdrawing at the start. Tools that withdraw at the start of each period will show a somewhat lower ending balance and a slightly shorter time before the money runs out.
Does the savings withdrawal calculator include taxes?
No, it ignores taxes. Withdrawals from traditional retirement accounts are generally taxed as income, while money in ordinary savings is taxed on its interest each year rather than on withdrawal. If taxes apply, the amount you can spend will be less than the withdrawal entered. Raise the withdrawal to cover expected tax for a fuller picture.
How do I account for inflation in a withdrawal plan?
This calculator keeps withdrawals level, so it does not raise them with prices. A simple workaround is to lower the return by an assumed inflation rate, which approximates withdrawals that keep their buying power. The money will usually run out sooner under that assumption, which is a useful cautious case.
Is it safe to keep retirement withdrawal money in a CD or savings account?
Money in insured savings accounts and CDs is protected up to $250,000 per depositor, per institution, per ownership category, and its value does not fall with markets. The trade-off is that its rate may not keep up with inflation over a long retirement. Some people keep a few years of withdrawals in deposits and the rest invested.
Why is my ending balance zero even though I chose 15 years?
Because the withdrawals used up the balance before the 15 years ended. When that happens, the calculator stops at zero and the money-lasts result shows how long it actually lasted. Lower the withdrawal, raise the return assumption cautiously, or shorten the period to see a plan that lasts. The total withdrawn will also be less than the full schedule.
What withdrawal frequency should I choose?
Choose the one that matches how you actually plan to take money out. Monthly suits most people living on savings, since bills are monthly. The amount you enter applies to each period, so $3,000 quarterly and $1,000 monthly are the same yearly total. Make sure you change the amount when you change the frequency.
Sources
- Deposit Insurance — Federal Deposit Insurance Corporation. Accessed October 17, 2026.
- Topic no. 403, Interest received — Internal Revenue Service. Accessed October 17, 2026.
- Actuarial Life Table — Social Security Administration. Accessed October 17, 2026.
- Compound Interest Calculator — U.S. Securities and Exchange Commission (Investor.gov). Accessed October 17, 2026.
We cite primary sources: regulators, central-bank data and federal agencies. Worked examples on this page are our own calculations, last checked October 17, 2026. See our methodology.