How Long Will Your Money Last in Retirement?

How long will your money last in retirement? If you retire at 65 with $1 million saved and spend $60,000 a year, the short answer is: past age 100 — because average Social Security covers about $24,852 of that spending, so your portfolio only has to provide $35,148 a year, or 3.5% of the balance. The rule of thumb behind that answer is the 4% rule: withdraw 4% of your nest egg in the first year of retirement, raise the amount with inflation each year, and history says the money lasts 30 years about 95% of the time.

How the 4% rule works — and where it came from

The rule has two parents. In 1994, financial planner William Bengen published a study in the Journal of Financial Planning that tested withdrawal rates against every 30-year stretch of US market history back to 1926, and found 4% was the highest rate that never ran out of money. In 1998, three Trinity University professors — Philip Cooley, Carl Hubbard, and Daniel Walz — repeated the exercise with more portfolio mixes in a paper known ever since as the Trinity study. Their headline result: a 4% inflation-adjusted withdrawal survived about 95% of historical 30-year periods for a balanced 50/50 or 75/25 stock-and-bond portfolio. An all-bond portfolio, by contrast, failed four times out of five — inflation eats it alive.

The arithmetic is simple. Take your annual spending, divide by 0.04 — or, equivalently, multiply by 25 — and that is the nest egg the rule says you need:

But the rule has limits, and they matter more than the rule itself. It is built only on US stock and bond history from 1926 to 1995; it ignores fund fees and taxes; it assumes you never change your spending, even in a market crash; and it was tested for 30 years maximum — retire at 50 and you need the money for 40-plus years, where the same 4% succeeds far less often. Morningstar's 2025 research put the baseline safe withdrawal rate for new retirees at 3.9%. Use the rule to size your target, then test your own plan with our retirement calculator.

How long do you actually need the money to last?

Most people plan for the average and get it wrong. The Social Security Administration's 2023 period life table — the version used in the 2026 Trustees Report — puts life expectancy at 65 at 18.1 more years for a man (to about 83) and 20.7 more years for a woman (to about 86). Those are averages, and averages hide the spread: about 24% of 65-year-old men and 35% of 65-year-old women live to 90. For a married couple, the chance that at least one partner reaches 90 is well above half. Source: Social Security Administration, Actuarial Life Table.

The practical rule: plan to 90, and to 95 if you want a margin of safety — a 25- to 30-year horizon from 65, which is why the Trinity study's 30-year window is the right frame. If you are still saving, see where you stand in our guide to how much you should have in your 401(k) by age.

Inflation: the slow leak in every plan

Inflation is the reason a fixed dollar amount is not a plan. At 3% a year — a reasonable long-run planning assumption, close to the historical average — $60,000 of spending today costs $108,367 in 20 years and $145,636 in 30 years. The 4% rule handles this by raising your withdrawal with inflation every year, which is why the dollar amount you take out keeps growing even as the percentage stays flat. In our worked example below, the $35,148 first-year withdrawal grows to $45,860 by year 10 and $61,632 by year 20 — same lifestyle, very different cheque.

The defence is to own assets that outgrow inflation over decades — stocks, in practice. What does not work is pretending inflation away: a plan that assumes 0% inflation understates a 30-year retirement's cost by nearly half.

What Social Security actually covers

Social Security is the floor under every American retirement plan, and it is bigger than most people think. The average retired-worker benefit in 2026 is $2,071 a month — $24,852 a year — after the 2.8% cost-of-living adjustment that took effect in January 2026. The maximum benefit at full retirement age (67 for anyone born in 1960 or later) is $4,152 a month. The system is designed to replace about 40% of pre-retirement income, and for the average retiree it does roughly that: $24,852 covers about 41% of $60,000 of annual spending.

Two decisions move that number a lot. First, when you claim: claiming at 62 cuts the benefit by about 30% versus full retirement age, while waiting until 70 raises it by about 24%. Second, your earnings record: the benefit is built from your 35 highest-earning years, so years out of work drag it down. Check your own estimate with our Social Security calculator.

Required minimum distributions: the withdrawals you cannot skip

Once you reach a set age, the IRS forces withdrawals from tax-deferred accounts — traditional IRAs, 401(k)s, 403(b)s — whether you need the money or not. Under the SECURE 2.0 Act, required minimum distributions (RMDs) start at age 73 if you were born between 1951 and 1959, and at age 75 if you were born in 1960 or later. Each year's RMD is your account balance on the previous December 31 divided by the IRS Uniform Lifetime Table factor — 26.5 at age 73, so a $500,000 balance means an $18,868 withdrawal that year. Miss an RMD and the penalty is a 25% excise tax on the amount not taken, cut to 10% if you correct it promptly. Source: IRS Publication 590-B.

RMDs matter for "how long will my money last" in two ways: they force taxable income, which can push you into a higher bracket, and they shrink the account on a fixed schedule regardless of market conditions. The one big exception: Roth IRAs have no required distributions during the original owner's lifetime — one more reason to hold some Roth money, as explained in our guide to how a Roth IRA works. Work out your own first RMD with our RMD calculator.

How long will your money last in retirement? A worked example

Meet the example: you retire at 65 with $1,000,000 saved, spend $60,000 a year, and claim the average Social Security benefit of $2,071 a month. We assume a steady 5% investment return and 3% inflation — smooth numbers, which real markets never deliver, but they show the shape of the answer.

Step 1 — what the portfolio must cover. Social Security pays $2,071 × 12 = $24,852 a year, so the portfolio covers $60,000 − $24,852 = $35,148 a year in year one — a 3.51% withdrawal rate, below the 4% rule.

Step 2 — the 25× check. The gap of $35,148 × 25 = $878,700 is the nest egg the 4% rule says this lifestyle needs. You have $1,000,000 — about $121,000 above the line.

Step 3 — year by year. Each year the balance grows 5% and the withdrawal grows 3% with inflation:

The verdict: the money covers 43 full years and runs out during year 44 — around age 108. Even at a lower 4% return it lasts 35 years, to age 100. At this spending level the plan outlives any realistic lifespan. Now change one variable and watch the answer move:

The $500,000 case is the warning: at a 7% withdrawal rate the money runs out at 83 — before average life expectancy ends. And without Social Security at all, $1 million funding the full $60,000 lasts only about 22 years, to age 87. The single biggest lever is not the return you earn; it is the gap between your spending and your Social Security cheque. Every $100 a month you add to that cheque — by working longer, earning more, or claiming later — is $1,200 a year your portfolio never has to provide.

One honest caveat: no real portfolio returns a smooth 5% every year. A market crash in your first few years of retirement — sequence-of-returns risk — does far more damage than the same crash a decade later, because you are selling into the fall. The table above is a planning model, not a prediction. Stress-test it in our compound interest calculator.

What shortens the runway — and what lengthens it

Shortens it: spending above 4–5% of the balance; retiring early, which adds years to fund; high fund fees (a 1% fee is a quarter of a 4% withdrawal); taxes on traditional withdrawals; and retiring into a bear market.

Lengthens it: flexible spending — trimming withdrawals by 10% after a down year is the single most powerful fix the research supports; part-time work in the first years of retirement; delaying Social Security to 70, which raises the cheque by about 24% over full retirement age; and holding Roth money, which has no RMDs and comes out tax-free. The common thread is control: the levers you can actually pull are spending, claiming age, and costs — not market returns.

The bottom line

How long your money lasts in retirement comes down to three numbers: what you spend, what Social Security covers, and what you have saved. The 4% rule turns those into a target — 25 times the income your portfolio must provide — and history says that target survives 30 years about 95% of the time. In our example, $1 million against $60,000 of spending with average Social Security lasts past 100; $500,000 against the same lifestyle runs out at 83. Find your own numbers before you retire, not after: run the retirement calculator, check your Social Security estimate, and plan to 90 — then build in a margin, because the cost of being wrong is running out of money when you can least afford to earn it back.