How Long Will My Money Last Calculator Bankrate

Time Until Depletion Formula:

\[ T = \frac{\ln(A / W)}{\ln(1 + R / n) \times n} \]

Initial Amount (A):

Regular Withdrawal (W):

Annual Interest Rate (R):

Compounding Frequency (n):

Time Until Depletion (T):

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1. What Is The Time Until Depletion Calculation?

The Time Until Depletion calculation estimates how long your savings will last when making regular withdrawals while earning interest. This is crucial for retirement planning and understanding the sustainability of withdrawal strategies.

2. How Does The Calculator Work?

The calculator uses the formula:

\[ T = \frac{\ln(A / W)}{\ln(1 + R / n) \times n} \]

Where:

$ A $ — Initial amount ($)
$ W $ — Regular withdrawal amount ($)
$ R $ — Annual interest rate (decimal)
$ n $ — Compounding frequency per year
$ T $ — Time until depletion (years)

Explanation: This formula calculates how long your money will last based on your initial savings, regular withdrawal amount, interest earned, and how frequently that interest compounds.

3. Importance Of Financial Planning

Details: Understanding how long your savings will last is essential for retirement planning, creating sustainable withdrawal strategies, and making informed financial decisions about your future.

4. Using The Calculator

Tips: Enter your initial savings amount, regular withdrawal amount, annual interest rate, and select how frequently interest compounds. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What happens if my withdrawals are less than the interest earned?
A: Your savings will never deplete and will actually grow over time, resulting in an infinite time estimate.

Q2: Does this account for inflation?
A: No, this is a simplified calculation. For more accurate planning, consider using inflation-adjusted values.

Q3: What's a safe withdrawal rate for retirement?
A: The 4% rule is a common guideline, suggesting you can withdraw 4% of your initial portfolio annually with inflation adjustments.

Q4: How does compounding frequency affect results?
A: More frequent compounding (daily vs annually) typically allows your money to last slightly longer due to more frequent interest accrual.

Q5: Should I use this for precise retirement planning?
A: This provides an estimate. Consult a financial advisor for comprehensive retirement planning that considers taxes, inflation, and market volatility.