Savings and investing guide
How Long Will My Savings Last? A Monthly Withdrawal Estimate
To estimate how long savings may last, start with the balance you can actually use, subtract each planned withdrawal, and account for any interest credited along the way. The result is a scenario, not a safe-withdrawal recommendation: inflation, fees, taxes, and changing returns can shorten the real-world runway.
The month-by-month calculation
This calculator applies the entered annual nominal rate as a monthly rate (annual rate ÷ 12), credits that interest to the starting balance, then subtracts the month-end withdrawal. In each month, ending balance = max(0, starting balance × (1 + annual rate ÷ 1,200) − withdrawal). It stops when the balance reaches zero or the selected projection horizon ends.
A zero-interest example
Suppose you have $30,000 available and plan to withdraw $2,500 at the end of each month. At a 0% assumed rate, $30,000 ÷ $2,500 = 12 withdrawals. The balance reaches zero with the twelfth withdrawal. This arithmetic example assumes the full balance is available, the withdrawal stays level, and there are no fees, taxes, or other cash flows.
How interest changes the estimate
A positive assumed rate can extend the modeled runway because interest is credited before each withdrawal. That does not make the rate guaranteed. A bank rate can change; investments can lose value; and withdrawals taken during a market downturn may have a different effect than a smooth monthly-rate model. Try a zero-rate scenario as a simple stress case and compare the projected ending balance at shorter horizons.
Use the right balance and withdrawal amount
Include only money intended to fund the withdrawals. Do not count the same cash as both an emergency reserve and spending money for another purpose. Build the monthly withdrawal from realistic expenses and account for irregular bills separately. If the amount varies, use a conservative average only as a first pass and revisit the estimate when actual spending changes.
What this runway does not cover
The model does not account for inflation, taxes, account fees, investment volatility, changing withdrawals, or other income. It is not a retirement drawdown plan and does not identify a sustainable withdrawal rate. For an important long-term plan, review account statements and tax treatment and consider advice from a qualified professional. The CFPB also recommends making savings decisions around personal circumstances and expenses rather than treating a single target as universal.
Make the projection useful for a real decision
Choose a horizon that matches the question you are trying to answer, such as covering a period between jobs or estimating how long a planned cash reserve may support a known expense. If withdrawals will be irregular, calculate a monthly baseline and set aside separate amounts for bills that do not arrive every month. Revisit the estimate when the balance, spending plan, or account terms change. A long runway under one smooth-rate scenario can hide important short-term risks, so compare a zero-rate case and a lower starting balance before relying on the estimate.
| Month | Starting balance | Withdrawal | Ending balance |
|---|---|---|---|
| 1 | $30,000 | $2,500 | $27,500 |
| 6 | $17,500 | $2,500 | $15,000 |
| 12 | $2,500 | $2,500 | $0 |
Frequently asked questions
Does a positive assumed return guarantee the balance lasts longer?
No. It only changes the mathematical scenario. Actual returns can vary, fees and taxes may apply, and investment values can fall.
What does “more than the horizon” mean?
The balance remains above zero at the final month you selected. It does not mean the funds will last indefinitely.
Sources and further reading
Try the calculator
Use the Savings Runway Calculator to explore your own numbers with the assumptions shown in the tool.
Related guides
Educational content only; not individualized financial, tax, or legal advice.