Why does my corpus run out faster than I expected?

Because the withdrawal grows too. A plan that holds spending flat in nominal terms is quietly assuming your cost of living never rises, which over a thirty year retirement is a very large assumption.

InvestmentretirementUnited States only

Retirement Withdrawal Calculator

How long a retirement corpus lasts when withdrawals rise with inflation each year. Holding withdrawals flat is what makes most retirement calculators too optimistic.

Also called: corpus depletion calculator, retirement drawdown.

Years the corpus lasts

30. Starting at 4,000 a month rising with 3% inflation, the final year’s withdrawal would be $9,426.26. The corpus outlives the horizon you planned for.

Balance after your planning horizon

$2,912,714.97

Monthly withdrawal in the final year

$9,426.26

Total withdrawn

$2,283,619.95

Monthly amount that would last the full period

$5,872.53

How it lands

The corpus outlives the horizon you planned for.

How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Simulate year by year: the balance grows at the return, then a withdrawal comes out, and that withdrawal is larger every year because prices rise. Over thirty years at six percent inflation the final withdrawal is nearly six times the first, which is the compounding most plans forget on the spending side while remembering it on the saving side.

each year: the balance grows, then a withdrawal that itself grows with inflation is taken out

W: First-year withdrawal (currency)
r: Return (decimal)
g: Inflation (decimal)

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

four thousand a month from 1.2 million, raised with inflation

Corpus at retirement: $1,200,000.00
Monthly withdrawal to start: $4,000.00
Return during retirement: 7%
Inflation, raising the withdrawal each year: 3%
Years to plan for: 30

Years the corpus lasts30

Worked separately year by year: the withdrawal starts at 48,000 and grows 3% a year, the balance earns 7%, and after 30 years 2,283,619.95 has been drawn with 2,912,714.97 left. The last year draws 48,000 x 1.03^29 = 113,115.09, which is 9,426.26 a month.

Open this example

no inflation makes the withdrawal flat

Corpus at retirement: $1,200,000.00
Monthly withdrawal to start: $4,000.00
Return during retirement: 7%
Inflation, raising the withdrawal each year: 0%
Years to plan for: 30

Years the corpus lasts30

boundary: the assumption most calculators make silently, and the reason their answers look generous

Open this example

a tiny withdrawal never exhausts it

Corpus at retirement: $1,200,000.00
Monthly withdrawal to start: $100.00
Return during retirement: 7%
Inflation, raising the withdrawal each year: 0%
Years to plan for: 30

Years the corpus lasts30

degenerate case: 1,200 a year against 84,000 of return never touches the capital

Open this example

Method and limits

What it assumes

Withdrawals at the end of each year, rising annually with inflation.

What it deliberately does not model

A constant return is assumed. Real sequences of returns can shorten this considerably.
Tax on withdrawals is not applied.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

Why does my corpus run out faster than I expected?: Because the withdrawal grows too. A plan that holds spending flat in nominal terms is quietly assuming your cost of living never rises, which over a thirty year retirement is a very large assumption.