Retirement spending calculator
With $500,000 saved at 65 and $2,000 a month from Social Security, you could spend about $3,946 a month in year 1 and raise it with inflation through age 95. This retirement spending calculator uses a constant 5% return before 0.3% fees, 2.5% inflation, no tax and no money left as a target. Enter your own savings and deadline below to find the maximum monthly spending under your assumptions.
Calculate your maximum monthly spending
You could spend about $3,946 a month in year 1 (rising with inflation), of which $1,946 comes from savings — a first-year withdrawal rate of 4.67%.
Constant-return arithmetic through age 95, not a forecast. The rate includes any optional tax on savings withdrawals. See the order-of-returns example.
Ending balance: $9; money-to-leave target in end-year dollars: $0.
If you plan to a different age
| Plan to age | Monthly spending in year 1 |
|---|---|
| 85 | $4,649 |
| 90 | $4,225 |
| 95 | $3,946 |
| 100 | $3,748 |
Balance by age
Year-end values below show the first three years, every fifth year and the final year. Download the CSV for every year.
| Age at year end | Growth | Planned spending | Income | Tax needed | Balance |
|---|---|---|---|---|---|
| 66 | $23,500 | $47,346 | $24,000 | $0 | $500,154 |
| 67 | $23,507 | $48,530 | $24,600 | $0 | $499,732 |
| 68 | $23,487 | $49,743 | $25,215 | $0 | $498,691 |
| 70 | $23,358 | $52,261 | $26,492 | $0 | $494,577 |
| 75 | $22,411 | $59,129 | $29,973 | $0 | $470,080 |
| 80 | $20,302 | $66,899 | $33,911 | $0 | $419,263 |
| 85 | $16,610 | $75,690 | $38,368 | $0 | $332,702 |
| 90 | $10,793 | $85,636 | $43,409 | $0 | $198,197 |
| 95 | $2,145 | $96,889 | $49,114 | $0 | $9 |
How savings and your plan age change monthly spending
Start with the row closest to your savings, then compare deadlines across that row. Each cell is total monthly spending in the first year, including the same $2,000 monthly income. The savings-funded portion is the cell amount minus that income. These examples solve the same question as the calculator; they do not assign a recommended retirement age or budget.
| Starting savings | To 85 | To 90 | To 95 | To 100 |
|---|---|---|---|---|
| $250,000 | $3,324 | $3,113 | $2,973 | $2,874 |
| $500,000 | $4,649 | $4,225 | $3,946 | $3,748 |
| $750,000 | $5,973 | $5,338 | $4,918 | $4,622 |
| $1,000,000 | $7,298 | $6,451 | $5,891 | $5,496 |
Changing savings affects only the money available from the portfolio; the entered income stays the same. A longer horizon usually lowers the monthly amount because the savings must cover more payments. To see the tradeoff for your situation, change the plan age while holding the other inputs fixed. Choosing a deadline is your assumption, not a prediction of lifespan.
First-year withdrawal rate that empties savings exactly at the plan age
This second table isolates portfolio withdrawals. Each percentage is first-year annual spending divided by starting savings, followed by inflation increases. It is arithmetic on constant returns, explicitly not a "safe withdrawal rate" and not a historical backtest. Actual withdrawals face changing returns; see why the order of returns matters before interpreting a percentage as a spending limit.
| Years funded | 3% return | 4% return | 5% return | 6% return | 7% return |
|---|---|---|---|---|---|
| 20 | 5.23% | 5.78% | 6.36% | 6.97% | 7.61% |
| 25 | 4.20% | 4.75% | 5.34% | 5.97% | 6.63% |
| 30 | 3.52% | 4.07% | 4.67% | 5.31% | 6.00% |
| 35 | 3.03% | 3.59% | 4.19% | 4.86% | 5.56% |
| 40 | 2.67% | 3.22% | 3.84% | 4.52% | 5.25% |
To reproduce a cell, enter $500,000, start at 65, set the plan age to 65 plus the row's years, choose the column's return, set both incomes to zero, and use the caption's other assumptions. With no tax, income or legacy target, scaling the starting balance scales spending proportionally, so this percentage is independent of portfolio size apart from rounding.
How it works
The solver tests a monthly budget against the shared annual drawdown model. If every year is fully paid and the ending balance meets your legacy target, it tries a larger budget. Otherwise, it tries a smaller one. After 80 binary-search steps, it rounds the feasible amount down to cents. The displayed dollar figure is approximate; the chart and CSV use the calculated cents.
Total spending and savings withdrawals are different numbers. Income active in the first year pays part of your budget, and savings cover the remainder. With a flat tax assumption, the gross savings withdrawal also includes the money needed to pay that tax. The first-year withdrawal rate divides this gross annual amount by starting savings. It does not divide total spending by savings.
Income that starts later cannot pay an earlier bill. Every modeled year must work, even if a later pension would leave a large ending balance. When income exceeds spending, the shared model adds the surplus to savings. With zero starting savings and immediate continuing income, no legacy target and no other constraints, spending equals that income; delayed income cannot fund the first year without savings.
Assumptions and limits
- Annual time steps: the return is applied to the opening balance, then spending is withdrawn and income is added at year end.
- Year 1 uses your amounts as entered; spending and income both rise with the inflation rate from year 2 (income is treated as fully cost-of-living adjusted, including before it starts).
- Fees are subtracted from the return every year.
- The balance cannot go below zero. "Runs short" means that year's spending could not be fully paid, so the balance is zero at year end. Spending that is exactly covered counts as funded.
- Optional tax: one flat percentage you enter, applied only to money taken from savings (spending minus income, grossed up). Income is treated as already after tax. It is a simplification, not a tax calculation.
- Required minimum distributions, account types and one-off costs are not modelled.
Here the return is also constant every year. Start age 65 and plan age 95 mean 30 annual payments, ending at 95, with no payment for a year beginning at 95. A negative return after fees relative to inflation is allowed; it reduces what savings can support. The output is a mathematical ceiling for these inputs, with no extra reserve for unexpected expenses or investment losses.
What you could spend and what you need to spend are different questions. Before treating the result as a budget, list your expected monthly costs: housing and property tax, health insurance premiums and out-of-pocket care, other insurance, food and transport, and discretionary spending such as travel. If those essentials alone come close to the solved amount, there is little room for surprises. The model also holds spending flat in today's dollars for every year; it cannot show a more active early retirement, lower spending later, or healthcare costs rising faster than general inflation. To test a phase, run the calculator once per phase with that phase's ages and amounts.
The optional legacy amount is entered in today's purchasing power, treating today as the start of withdrawals. The nominal end target equals that amount times (1 + inflation) raised to the number of modeled years. The tool does not project growth or inflation between the actual current date and a future retirement date. If even zero spending misses the target, it reports that the target cannot be reached.
FAQ
How much can I spend per month in retirement with $500,000?
Under one set of assumptions, about $3,946 a month in year 1, including $2,000 from Social Security. This example starts at 65, plans to 95, and uses a constant 5% return before 0.3% fees and 2.5% inflation, with no tax or legacy target. Spending and income then rise with inflation. Different inputs give different answers.
Does Social Security count toward my spending?
Yes. The headline is total spending, including the income you enter. Income offsets what savings must provide from its start age. Enter it after tax, in first-year dollars. The model raises it with inflation even before it starts; it does not calculate benefits or claiming-age adjustments.
Why does the answer change so much with the plan-to age?
A later plan age adds years of spending and inflation increases. The solver must fund every year without running short, so spreading the same savings over more years generally reduces monthly spending. Income starting later and a legacy target can also change which year limits the result.
Is this the same as the 4% rule?
No. That is a common rule of thumb. This tool solves for spending using your chosen constant return, fees, inflation, income, horizon and legacy target. Its withdrawal rate is a calculated first-year ratio, not a safe withdrawal rate or a result from historical market testing.
Does the calculator include taxes?
Tax is off by default. You may enter one flat rate, up to 50%, on money taken from savings. The tool grosses up the savings-funded portion of spending to cover that tax. Income is treated as already after tax. It does not calculate brackets, account-specific rules or tax on Social Security.
Related tools
Already have a monthly budget? Use how long will my retirement savings last to solve for duration instead. Explore sequence of returns risk to see different paths with the same set of returns, or read the methodology to check the annual formulas in a spreadsheet.