Retirement Longevity Calculator

What this calculator does

This calculator measures longevity risk, meaning the chance your pot runs out before you do. Enter a starting balance, a withdrawal rate, an expected return and an inflation rate, and it draws an inflation-adjusted income each year until the money is gone, reporting the age at which that happens.

The output is a single age rather than a probability, and the exercise that gives it meaning is comparing that age against how long you might realistically live. A pot lasting to 89 is comfortable for a single person in poor health at 70 and genuinely risky for a healthy couple retiring at 60.

When to use it

Run it once you have a real pot and a spending figure, to test them against a realistic horizon rather than an average one. It matters most for anyone retiring at or near pension access age, since stopping at 57 can mean a forty-year drawdown that conventional thirty-year rules of thumb were never designed for.

It is also the right lens for two decisions: whether to defer the State Pension, and whether to annuitise part of the pot. Both trade capital or waiting time for guaranteed lifetime income, and this calculator shows what the pot has to survive if you do neither.

Understanding the inputs

Starting balance should be the money genuinely available to spend, combining SIPPs, workplace pots and any ISAs earmarked for income, and excluding property. Withdrawal rate applies to that starting figure and is then indexed, so 4 percent of £450,000 means £18,000 in year one rising with inflation regardless of market performance.

Expected return should suit a drawdown-stage portfolio and be net of platform and fund charges, so nearer 5 percent than 7. Use 2.5 percent for inflation as a central assumption. The gap between the two is what drives the result, so testing a 3.5 percent return is a worthwhile stress test.

How is this calculated?

Drawdown is calculated year by year, subtracting inflation-adjusted withdrawals from a growing portfolio.

A worked example

A £450,000 pot at age 60, returning 5 percent against 2.5 percent inflation, supports a 4 percent withdrawal of £18,000 in year one and lasts about 41 years, running out near age 101. Raise the rate to 4.5 percent, or £20,250, and it lasts 34 years instead, ending around 94.

The return assumption is equally powerful. Hold withdrawals at 4 percent but assume 3.5 percent returns rather than 5, and depletion arrives at about age 90 instead of 101. Add a full State Pension from 67 and the pot's share of spending falls sharply, which is usually the cheapest way to extend the horizon.

Limitations and assumptions

This is a projection under fixed assumptions rather than a prediction, and its main simplification conceals the very risk it measures. One flat annual return cannot express sequence-of-returns risk, and a poor opening five years can empty a pot a decade earlier than the same average return arriving in a kinder order.

It also excludes the State Pension, any defined benefit income, income tax on withdrawals, the 25 percent tax-free element, the money purchase annual allowance, and care costs, and it assumes you never adjust spending when real retirees always do. Treat the depletion age as indicative and revisit it every year.