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Savings Duration Formula:
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This calculator determines how long your savings will last based on your current savings balance and monthly withdrawal rate. It helps with retirement planning, budgeting, and financial forecasting.
The calculator uses a simple formula:
Where:
Explanation: The formula divides your total savings by your annual withdrawal rate (monthly withdrawal × 12) to determine how many years your savings will last.
Details: Understanding how long your savings will last is crucial for retirement planning, emergency funds, and financial security. It helps prevent outliving your resources.
Tips: Enter your total savings and expected monthly withdrawal amount. Both values must be positive numbers. The result shows how many years your savings will last at the current withdrawal rate.
Q1: Does this calculator account for interest or investment growth?
A: No, this is a simple calculation that assumes no interest or investment returns. For more complex scenarios, consider a retirement calculator that includes growth rates.
Q2: What if my withdrawals change over time?
A: This calculator assumes constant withdrawals. For variable withdrawal plans, you would need a more advanced financial planning tool.
Q3: How accurate is this calculation?
A: It provides a basic estimate but doesn't account for inflation, taxes, or unexpected expenses. Use it as a starting point for planning.
Q4: Should I include all my assets in "savings"?
A: Include only liquid assets you plan to withdraw from. Retirement accounts, investments, and other assets may need separate consideration.
Q5: What's a good target for how long savings should last?
A: For retirement planning, many experts recommend having enough savings to last 25-30 years or more, depending on your age and health.