Include taxes and healthcare paid from the portfolio, then subtract reliable income.
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How bumpy the ride is. Higher volatility makes sequence risk bite harder.
Your money lasts
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Steady-average baseline
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Why the order of returns matters
These three scenarios use the exact same average return and the same average volatility. The only difference is when the bad years hit. Watch how many years separate them:
| Scenario | Years money lasts | vs steady average |
|---|
"Bad years first" models retiring just before a sustained downturn (think a 2000 or 2008 retiree); "good years first" models retiring into a bull run. Same average return, same volatility — only the timing differs. This is a deterministic illustration of the mechanism, not a Monte Carlo probability, and the weak years are front-loaded but interleaved to stay realistic.
How the drawdown works
Each year the calculator applies that year's return to your balance, then subtracts your spending, which rises with inflation. Money "runs out" the first year the balance can't cover a full year of spending. The formula each year is simply:
New balance = (Balance − Spending) × (1 + return)
Spendingnext = Spending × (1 + inflation)
Spendingnext = Spending × (1 + inflation)
The "steady average" mode applies your average return every year. The sequence modes keep the same average but reorder the good and bad years — front-loading losses ("bad years first") is the dangerous case for a retiree, because you're selling assets while they're down and the recovery happens on a smaller base.
Frequently asked questions
Related Tools
Decision guide
Read portfolio longevity as a sensitivity test
This calculator holds spending, returns, and inflation to a defined path. It identifies fragile combinations, but real retirements experience uneven returns and changing expenses.
A nominal return must be paired with inflation; a real return already reflects it.
Increase spending or reduce return until the plan fails.
What this model includes
- Portfolio growth and withdrawals
- An estimated depletion year under constant assumptions
What to add outside the model
- Sequence-of-returns risk and variable spending
- Taxes, fees, allocation, and withdrawal order
Calculation standard: Formula details, source policy, tests, and limitations are documented in the FinancialDepth methodology. Reviewed July 18, 2026.