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.
The order the fields are filled in makes no difference to the result — the calculator recomputes the whole formula from whatever is currently in every field, not step by step. That means it is safe to adjust one number, watch the result change, and adjust it back, without worrying about resetting anything first.
Why how long money lasts matters
FIRE stands for Financial Independence, Retire Early — reaching a portfolio large enough that investment income covers your living costs, so paid work becomes a choice rather than a necessity. It is not a specific account or product, just the point at which the figures below cross over.
The formula behind how long money lasts is standard and has not changed in decades; what changes is the situation it gets applied to. Two households can run the identical calculation and land on very different conclusions once their own numbers — income, rate, term, balance — are dropped in, which is why a generic textbook example is less useful than a calculator you can adjust to match your own circumstances.
It is also useful as a sense check before signing anything. A quote, an offer letter or a spreadsheet from someone else can contain an error, an optimistic assumption, or simply a different convention for rounding — running the same inputs through an independent calculator is a quick way to confirm a number before relying on it.
The reason a page like this exists at all, rather than leaving the calculation to a spreadsheet or a textbook appendix, is that the formula behind how long money lasts is fiddly enough to get wrong by hand but not complicated enough to need specialist software. That middle ground — real enough maths to matter, simple enough to check instantly — is exactly what a dedicated calculator is for, and it is why the same figure recalculated here should match a careful manual calculation almost exactly.
In practice, most people arrive at a page like this one having already tried a version of the calculation by hand or in a spreadsheet, and use the calculator here to confirm it rather than replace it. That is a reasonable way to use it — the two should agree to the last decimal place if the same inputs and the same formula are used, and if they do not, the formula shown above is the one to check your own working against first.
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
These figures are only the calculator's own starting values, included so the working is visible rather than hidden inside the tool above. Replace them with your own numbers and the same arithmetic applies — nothing about the method changes, only the inputs feeding it.
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.
A useful check on any unfamiliar result is to compare it against a rough mental estimate first — round the inputs to convenient numbers and see whether the calculator's answer lands in roughly the same territory. A wildly different figure usually means one of the fields was entered in the wrong unit, most often a percentage typed as a whole number where a decimal was expected, or the reverse.
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.
Whenever one of the underlying figures changes — a new interest rate, a different balance, an updated term — since the result only reflects what is currently in the fields. There is no need to keep a separate record of past results; the web address for a filled-in version already carries the figures used to produce it.
Not unless a tax rate or a fee is explicitly one of the inputs above. Where it is not, the figure shown is a gross calculation, and any tax due depends on your personal circumstances and current tax rules, which are worth checking separately.
The arithmetic itself is exact — the calculator applies the formula shown above precisely, with no rounding until the final figure is displayed. The uncertainty, where it exists, is entirely in the inputs: an estimated rate or an approximate balance carries that same approximation through to the result.