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Finance Calc Kit
Savings

Savings Withdrawal Calculator

Calculate how long savings last with regular withdrawals, or determine maximum periodic withdrawal based on interest rate and inflation.

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Savings duration

9 years, 7 months

115 months at $1,000.00 starting withdrawal with 5.0% return and 2.0% inflation.

Total withdrawn

$126,337.33

Total interest earned

$26,337.33

Initial withdrawal rate

12.00%

Annualized first-year withdrawal

Withdrawn vs interest earned

Total cash flow$152,674.65
  • Total withdrawn$126,337.3382.7%
  • Interest earned$26,337.3317.3%

Assumptions

Starting balance
$100,000.00
Annual return
5.00%
Annual inflation
2.00%
Monthly return rate
0.4074%

How savings withdrawals are calculated

Monthly compounding with inflation-adjusted withdrawals. Open to see each step.

  1. Convert annual rates to monthly compounding

    rm=(1+r)1/12−1=0.4074%,im=(1+i)1/12−1=0.1652%r_m = (1 + r)^{1/12} - 1 = 0.4074\%, \quad i_m = (1 + i)^{1/12} - 1 = 0.1652\%

    Nominal return 5.0% and inflation 2.0% are compounded monthly before each withdrawal.

  2. Monthly balance after interest and payout

    Bm=Bm−1×(1+rm)−WmB_m = B_{m-1} \times (1 + r_m) - W_m

    Each month the balance earns interest, then you withdraw the inflation-adjusted amount starting at $1,000.00.

  3. Inflation-adjusted withdrawal schedule

    Wm=Wm−1×(1+im)W_m = W_{m-1} \times (1 + i_m)

    Withdrawals rise each month to preserve purchasing power as prices increase.

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How long will your savings last?

A savings withdrawal calculator estimates how long a cash or investment balance lasts when you take regular payouts. It compounds monthly returns, adjusts withdrawals for inflation, and can also solve for the maximum sustainable monthly withdrawal over a chosen horizon.

To figure out how much you need to save before withdrawals begin, use the savings calculator. For retirement-specific drawdown planning and the 4% rule benchmark, see the retirement withdrawal calculator. For mutual fund style fixed monthly redemptions from a lump sum corpus, try the SWP calculator.

Monthly balance with inflation-adjusted withdrawals

Each month the remaining balance earns interest, then you withdraw an amount that grows with inflation to preserve purchasing power. The recurrence is:

Bm=Bm−1×(1+rm)−Wm,Wm=Wm−1×(1+im)B_m = B_{m-1} \times (1 + r_m) - W_m, \quad W_m = W_{m-1} \times (1 + i_m)

Where B is the account balance, W is the monthly withdrawal, r_m is the effective monthly return, and i_m is the effective monthly inflation rate. Annual rates convert to monthly compounding with (1 + annual)^(1/12) - 1.

Worked example: $100,000 at $1,000 per month

Suppose you start with $100,000, withdraw $1,000 in the first month, earn 5% annually, and assume 2% annual inflation. The first month earns about $408 in interest, bringing the balance to roughly $100,408 before the $1,000 withdrawal. Each subsequent withdrawal rises slightly with inflation while returns compound on the remaining balance.

Under these assumptions the account lasts about 9.6 years (115 months). If returns consistently exceed inflation plus the withdrawal rate, the balance may never deplete.

Maximum withdrawal mode

When you know how long you need income, the calculator searches for the highest starting monthly withdrawal that still leaves your target ending balance. This is useful for bridge funding, planned account drawdowns, or stress-testing a fixed horizon before retirement distributions begin.

Key inputs that change the outcome

  • Starting balance: Higher principal extends runway or supports larger withdrawals.
  • Withdrawal amount: Even small increases compound over time and shorten account life.
  • Return rate: Higher expected returns slow depletion but are not guaranteed.
  • Inflation rate: Rising withdrawals accelerate balance decline compared with fixed nominal payouts.

Frequently asked questions

What is a safe withdrawal rate?
The 4% rule is a common retirement planning baseline: withdraw 4% of the initial balance in year one, then adjust for inflation each year. Your sustainable rate depends on returns, inflation, taxes, fees, and how long you need income.
How does inflation affect savings duration?
Inflation increases each withdrawal to maintain purchasing power. That raises total cash outflows over time and shortens how long a fixed starting balance lasts compared with flat nominal withdrawals.
When can savings last indefinitely?
If investment growth after inflation consistently exceeds the withdrawal rate, the balance may stabilize or grow. The calculator flags this when monthly interest keeps pace with inflation-adjusted withdrawals.
Should I use monthly or annual compounding?
This tool compounds monthly, which is standard for savings accounts and many portfolio models. Monthly steps better capture inflation-adjusted withdrawals taken throughout the year.
Can I share my scenario?
Yes. Inputs sync to the URL so you can bookmark or share your assumptions with a financial planner or family member.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.