How long will my retirement savings last?
Last reviewed:
In Phase 2’s sample, ₹2.97 Cr of savings spent at ₹1,00,000 a month, rising 7% a year with prices, gives this answer: “Your spendable savings run out in year 25.” It rests on the assumptions below, so read it as an example of how to read an answer, not as a forecast.
The sample plan
| Savings at the start | ₹2,97,19,461, the emergency fund included |
|---|---|
| Monthly spending, first year | ₹1,00,000, rising 7% a year |
| Years planned for | 40 |
| Emergency fund | 12 months of spending, kept aside |
| Bucket 1 | 18 months of spending. All in ultra-short debt. |
| Bucket 2 | 48 months of spending. Holds 80% bonds and gilts, 20% large-cap equity. |
| Bucket 3 | Whatever is left. Holds 80% mid/flexi-cap equity, 20% bonds and gilts. |
| Returns a year, before tax | Large-cap equity 9%, mid/flexi-cap equity 10%, bonds and gilts 6%, ultra-short debt 5.5%, liquid and arbitrage 5% |
| Tax | Flat rates on the gains in what is redeemed: 12.5% on equity, 30% on debt |
| The answer | Your spendable savings run out in year 25. |
The rest of the rules are on How finfire works.
A quick check
₹1,00,000 a month is ₹12.00 L a year. Against ₹2.97 Cr of savings, that is a withdrawal rate of 4.04% in the first year, as the page shows it. Spending then rises with prices every year while the savings follow their own path, so each year takes more rupees than the last.
What decides how long savings last
- Your first-year withdrawal rate: your spending as a share of your savings. See how often savings last at each rate in 2,000 simulated markets.
- Inflation: the faster prices rise, the faster your spending grows.
- Returns, and their order: see Sequence of returns risk.
- Tax: Phase 2 works it out on the gains in whatever leaves a bucket, at flat rates, or with Tax slabs (Pro) on India’s slabs, in the new or old regime, or on US federal brackets.
- How your savings are split: see The three-bucket retirement strategy.
Check it on your own figures
Phase 2 · Burndown works out, as you type, the year your spendable savings run out. Anyone can open its sample; a free account lets you plan with your own figures; Pro adds Tax slabs, simulated markets and What would it take?, among others. Still working? Phase 1 · Accumulate works out what your savings will be when you stop.
Both calculators also work in dollars, with US federal tax brackets.
Open Phase 2 · Burndown → · Open Phase 1 · Accumulate →
Questions
How much do I need to retire?
Start from the monthly spending you expect once you stop, let it rise with prices, and test how long an amount of savings lasts with returns and tax you believe. Phase 2’s What would it take? (Pro) works back to the least savings that last the years you plan for.
Is a 4% withdrawal rate safe?
No rate is safe for everyone: it depends on how long you plan for, the markets you meet, inflation and tax. On Phase 2’s sample assumptions, savings spent at 4% in the first year last 30 years in 36% of 2,000 simulated markets. See Is a 4% withdrawal rate safe in India?