Retirement Longevity Calculator

What this calculator does

This calculator measures longevity risk: the chance that your portfolio runs out before you do. It takes a starting balance, a withdrawal rate, an expected return and an inflation rate, then draws an inflation-adjusted income each year until the balance is exhausted, reporting the age at which that happens.

The output is deliberately a single age rather than a probability, and the useful exercise is to hold that age up against how long you might actually live. A portfolio lasting to 89 is comfortable for someone in poor health at 70 and genuinely dangerous for a healthy couple retiring at 62.

When to use it

Use it once you have a real balance and a spending plan, to check the two against your realistic horizon rather than an average one. It is most valuable for early retirees, where a forty-year drawdown makes conventional rules of thumb built around thirty years unreliable.

It is also the right frame for two specific decisions: whether to delay Social Security to 70, and whether to annuitize part of the portfolio. Both convert capital into guaranteed lifetime income, and this calculator shows what the portfolio has to survive without them.

Understanding the inputs

Starting balance should exclude your home and anything already committed elsewhere, since only spendable assets fund withdrawals. Withdrawal rate applies to the starting balance and is then indexed, so 4 percent of $850,000 is $34,000 in year one and rises with inflation thereafter regardless of what the portfolio does.

Expected return should reflect a retirement-stage allocation net of fees, so nearer 5 percent than 7 for a portfolio with real bond exposure. Use 3 percent inflation as a long-run US figure. The gap between those two is what drives the result, and testing a 4 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

An $850,000 portfolio at age 62, returning 5 percent against 3 percent inflation, supports a 4 percent withdrawal of $34,000 in the first year and lasts about 37 years, running dry near age 99. That looks safe. Raise the rate to 4.5 percent, or $38,250, and it lasts 31 years, ending around 93.

The return assumption matters just as much. Hold the withdrawal at 4 percent but assume 4 percent returns instead of 5, and depletion arrives at about age 92 rather than 99. A single percentage point of return costs seven years, which is roughly the same damage as raising withdrawals by half a point.

Limitations and assumptions

This is a projection under fixed assumptions, not a prediction, and its central simplification hides the risk it is meant to measure. Applying one flat return every year cannot represent sequence-of-returns risk, and a bad opening five years can exhaust a portfolio a decade earlier than the same average arriving in a friendlier order.

It also excludes Social Security, pensions, taxes on withdrawals, required minimum distributions from 73, healthcare shocks and long-term care, and it assumes you never adjust your spending, when real retirees always do. Read the depletion age as one point in a wide distribution and revisit it annually against your actual balance.