● Money & small business
How long will $500,000 last in retirement? A table by withdrawal and return
How long savings last depends on how much you take out each year and what the rest earns after inflation. Here's the answer for $500,000 and a few other balances, using the same drawdown rule as our FIRE planner: each year the balance grows by the real return (return minus inflation), then the year's withdrawal comes out. Withdrawals are in today's dollars, so they keep their buying power. The years shown are full years of withdrawals paid; what's left after that is less than one year's withdrawal.
$500,000: years of withdrawals by real return
| Withdrawal a year (today's $) | 0% real | 2% real | 3% real | 4% real |
|---|---|---|---|---|
| $20,000 (4%) | 25 | 35 | 46 | never runs out |
| $30,000 (6%) | 16 | 20 | 23 | 28 |
| $40,000 (8%) | 12 | 14 | 15 | 17 |
| $50,000 (10%) | 10 | 11 | 12 | 13 |
| $60,000 (12%) | 8 | 9 | 9 | 10 |
"Never runs out" means the withdrawal is no more than what the balance earns: at a 4% real return, $500,000 earns $20,000 a year. Above that line, the balance shrinks every year and the shrinking speeds up, which is why the return matters much less for large withdrawals: at $60,000 a year, going from 0% to 4% only adds two years.
Other balances at a 3% real return
| Withdrawal a year | $250,000 | $500,000 | $750,000 | $1,000,000 |
|---|---|---|---|---|
| $20,000 | 15 | 46 | never runs out | never runs out |
| $30,000 | 9 | 23 | 46 | never runs out |
| $40,000 | 7 | 15 | 27 | 46 |
| $50,000 | 5 | 12 | 20 | 30 |
| $60,000 | 4 | 9 | 15 | 23 |
The withdrawal a balance can pay indefinitely at 3% real is 3% of it: $7,500 from $250,000, $15,000 from $500,000, $22,500 from $750,000 and $30,000 from $1 million. Withdrawing 4% of the balance at a 3% real return lasts 46 years, whichever balance you start with.
What this table leaves out
- Returns aren't steady. These are averages. A market fall early in retirement shortens the time more than the same fall later, because withdrawals lock in the losses.
- Taxes. Withdrawals from a 401(k) or traditional IRA are taxed as income, so the spendable amount is lower.
- Other income. Social Security or a pension reduces what the savings have to cover, which moves you up the table.
- Spending changes. Many retirees spend less as they age and more on health care; this table assumes the same real amount every year.
Your own numbers
The free FIRE calculator projects how long it takes to reach the balance that pays your spending, and our 401(k) match calculator the income your contributions buy. Every figure above comes from the same yearly drawdown rule as our FIRE planner spreadsheet, which was checked against an independent calculation. Not financial advice.