How Long Will My Savings Last?

How the drawdown maths works

The calculator walks forward one year at a time, and each year it does the same three things: it adds your investment return to whatever balance is left, it works out what your monthly spending costs by that year once inflation has been applied, and it subtracts twelve months of that spending. Whatever survives carries into the next year. When the balance hits zero, that is your runway.

There is no hidden model here. Your return is applied to the remaining balance, so it shrinks in cash terms as the balance does. A good return on a portfolio you have half spent is a smaller cushion than the same percentage was on day one. That is why drawdowns tend to look comfortable for years and then fall away faster than people expect towards the end.

The results table shows each year alongside the remaining balance, the return that year in both annual and monthly terms, and your monthly spending. Every money column is at today’s prices, which is why the spending column stays level rather than climbing. The last column is how far prices have risen by that year, so a figure multiplied by it is what the same amount would be in that year’s own money. The monthly columns are that year’s monthly rate rather than a separate month-by-month simulation, so read them as a per-year snapshot of what your life costs and what your savings are producing.

Why inflation quietly shortens your runway

Inflation shortens your runway because the spending figure you entered is what your life costs today, and the calculator makes it cost more every single year afterwards. You enter one number; the projection quietly raises it in the background for the whole horizon.

Skipping inflation is flattering rather than useful. A plan that works on today’s prices for twenty years is not the same plan once two decades of price rises have been applied to every year of groceries, rent and insurance. The compounding runs against you here in exactly the way investment returns run for you, and over a long break the two are fighting each other directly.

The useful shorthand is your real return: your investment return minus inflation. If those two numbers are close together, your savings are roughly treading water in purchasing-power terms, and your runway is set almost entirely by how much you spend rather than by how your portfolio performs. Set inflation to zero and then back again to see how much of your runway was resting on it.

The results divide that growth back out again, so it never appears as a climbing spending column. Every figure is at today’s prices, the spending line stays flat, and the shortening shows up in the balance instead.

Average returns are not the same as real market history

An average return tells you where a portfolio ends up; it tells you nothing about the road it took. This calculator applies one steady rate every year, which makes the maths transparent and the result easy to reason about, but real markets have never delivered a smooth line.

The order matters far more once you are spending than it ever did while you were saving. A poor first few years forces you to sell more of the portfolio at low prices to cover the same spending, and the smaller balance left behind has less to recover with when markets turn. Two portfolios with an identical twenty-year average can leave one person comfortable and another out of money, purely because of the sequence. This is why a flat-rate projection is best read as a central estimate rather than a guarantee.

When you want to pressure-test the same plan, the FIRE simulator runs a spend-down against roughly 150 years of real market history instead of a single assumed rate, so you can see how the same savings and spending would have fared starting in a good decade and in a bad one.

Key drawdown concepts

You do not need to be fluent in retirement jargon to use this tool, but a handful of terms make the results much easier to read.

• Runway: How long your savings can cover your spending before the balance reaches zero. It is the one number most people actually came for, and on the chart it is the point where the balance line meets the bottom of the axis.
• Drawdown: Living off capital you already have rather than income you still earn. Whenever you take out more than the portfolio produces, the balance shrinks: the gap between your spending and your investment return is what sets the pace.
• Real return: Your investment return minus inflation: roughly what your money gains in purchasing power rather than in headline currency. When a return only matches inflation, your runway is governed almost entirely by how much you spend.
• Today's money: Every balance, return and spending figure in the results is shown at today’s prices. The projection grows your spending with inflation each year and then divides every figure back by that same inflation, so the spending column stays level at the figure you entered and the balance shows what it would buy now rather than a larger number that buys less.
• Sequence of returns: The order your returns arrive in, which matters enormously once you are spending rather than saving. A poor stretch early in a drawdown sells more of the portfolio at low prices, and can shorten a runway that an averaged assumption calls comfortable. The sequence of returns risk calculator measures how much the first few years decide. Open the sequence of returns risk calculator.
• Withdrawal rate: Your annual spending as a percentage of your starting balance, a quick sanity check on any drawdown plan. The larger the share of the portfolio you consume each year, the more your runway depends on returns arriving on schedule.

What this calculator leaves out

Three things, mainly: tax, income, and anything lumpy. The projection subtracts your spending straight from the balance with no tax on withdrawals or gains, models no earnings of any kind, and treats your spending as one steady figure that moves only with inflation.

None of those omissions are accidents. Drawdown tax depends on your country, your account types and how much you take in a given year, so a single built-in rate would be wrong for almost everyone. Raising your monthly spending to the amount you need after tax is the honest workaround. Lumpy costs such as a car, a house move or a medical bill are similarly personal; the practical approach is to subtract them from your starting balance before you begin.

Income is the omission that changes the picture most, because very few career breaks are truly income-free. For a simple side-income ramp without taxes to model, the quit-my-job calculator adds that ramp to the same runway question. If you expect freelance work, a partner’s salary, rental income or a pension starting partway through, taxed correctly, the lifestyle change calculator is built for planning the break itself rather than just the runway.