The formula
How to calculate how long money lasts
Given a balance, a withdrawal and a return, this works out the year the money runs out. It is the depletion question, and the answer is far more sensitive to the withdrawal than to the return.
Everything is in real terms, so the withdrawal keeps its purchasing power throughout and the answer is in today's money. If the withdrawal is smaller than the return the portfolio earns, no depletion year exists and the calculator shows a dash.
The inputs, one by one:
- Starting balance
- Annual withdrawal
- Real return (%)
No submit button: type and the answer moves. Your inputs end up in the link, so the page can be shared already filled in.
Worked example
Take the figures the calculator starts with:
- Starting balance: 500,000
- Annual withdrawal: 30,000
- Real return: 3 %
That gives:
- Years until the money runs out: 23.4 years
- Years with no growth at all: 16.7 years
- Withdrawal that would last forever: 15,000
Reading the result
The perpetual figure marks the boundary. Below it the balance grows indefinitely; above it, every extra pound withdrawn shortens the timeline sharply — withdrawing 20% more than the perpetual amount can halve the number of years.
Where this goes wrong. A steady return is not how markets behave. Two portfolios averaging 3% real can differ by a decade depending on whether the poor years arrive first, because early losses come out of a balance that also has withdrawals against it.
At £30,000 a year with a 3% real return, roughly 22 years. At £25,000 it lasts about 32 years, and at £20,000 it never runs out — small changes in withdrawal, large changes in outcome.
Model it by reducing the withdrawal from that point. Guaranteed income arriving later dramatically extends the portfolio, because it cuts the drawdown during exactly the years when the balance is smallest.
It returns years until the money runs out. With 500,000 starting balance, 30,000 annual withdrawal and 3 % real return, that comes to 23.4 years. Change any field and the figure moves with it.