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Request InformationThe First Command Financial Services Retirement Income Calculator shows how long your money will last in retirement, given your savings, a first-year withdrawal, an expected return and a yearly inflation raise. It also gives your withdrawal rate and the total you take out.
Type in your own numbers, then change one at a time to see which matters most. It's an illustration, not a forecast, and the text below explains how to read what comes back.
Each year the same two things happen. The balance earns your expected return, and then your withdrawal comes out. That withdrawal rises by your inflation raise every year, so the income you spend keeps its buying power while the balance shrinks or grows depending on the return.
Take a hypothetical retiree with $1.5 million, a 4.5% return and a first withdrawal of $68,000, raised 2.5% each year. The first withdrawal is about 4.5% of savings. By year 4 the income is $73,229 and savings are still $1,487,178, so nothing looks wrong. The drop comes later, once larger withdrawals are taken from a smaller balance. Savings run out in year 31, when only $16,328 is left to pay.
| Year of retirement | Income that year | Remaining savings |
|---|---|---|
| 4 | $73,229 | $1,487,178 |
| 8 | $80,831 | $1,440,579 |
| 12 | $89,222 | $1,350,447 |
| 16 | $98,484 | $1,204,816 |
| 20 | $108,708 | $989,039 |
| 24 | $119,994 | $685,242 |
| 28 | $132,450 | $271,653 |
| 31 | $16,328 | $0 |
Look at the years first, then the withdrawal rate. If you leave service at 42 after 20 years, you may need income for 50 years or more. If you retire from a second career at 65, 30 years is a more realistic span. A result of 31 years is fine for the second person and thin for the first.
Here's a quick test: count the years from your retirement date to age 95. If the calculator shows fewer years than that, lower the withdrawal or look for more income before you do anything else.
Enter only the gap. Say a hypothetical Army retiree spends $96,000 each year, and the military pension covers $48,000. The calculator should get a $48,000 withdrawal, not $96,000. On a $900,000 Thrift Savings Plan balance that's a 5.3% rate, which is high, so the result will probably come back short.
The calculator assumes a steady return every year. Real markets don't behave that way, and a bad first 3 years hurts far more than a bad year 25. It also leaves out income taxes on TSP and IRA withdrawals, Social Security, health costs and any spending that jumps around.
At First Command Financial Services, the written plan is built around the moment people are most likely to get it wrong: selling after a drop. We'd rather keep a cash reserve for 2 years of withdrawals, because selling stocks in a down year is what damages a portfolio for good. Before First Command Financial Services suggests selling anything to fund a withdrawal, we write down what the sale triggers in taxes.
Investments can lose value, and you may get back less than you invested, so treat any result here as a range of possibilities, not a schedule.
Roughly 4% to 4.5% of starting savings, raised for inflation each year, has often lasted about 30 years in illustrations like the example above. No rate is safe in every market. A longer retirement, such as one starting at 42 after military service, calls for a lower rate.
No, subtract it first. Enter only the amount you'll need to take from savings such as the Thrift Savings Plan or an IRA. If you spend $90,000 each year and the pension pays $50,000, the first-year withdrawal is $40,000. Putting in the full $90,000 makes the result look far worse than it is.
No. It treats every dollar withdrawn as the dollar you spend. Withdrawals from a traditional TSP or IRA are generally taxable income, so you may need to withdraw more than you spend. Roth withdrawals work differently, and some states tax retirement income. Check your state's rules.
Because each withdrawal is raised by the inflation percentage, higher inflation makes every later withdrawal bigger while the balance earns the same return. In the example, a 2.5% raise takes the first $68,000 to $132,450 by year 28. A larger raise pulls the end date closer.
A lot, and the unit of the withdrawal is the usual culprit. Enter $5,000 a month as 5,000 instead of $60,000 for the year, and the withdrawal rate shows 0.3% on $1.5 million. The money seems to last forever. It won't.
Return assumptions do the same quiet damage. Nudging 4.5% up to something that sounds optimistic can add years on screen that the markets never agreed to. Use a return a bit below what you hope for, and run the numbers again with 2% inflation and 3% inflation.
This article is general financial information only, not investment advice tailored to your circumstances. Investing involves risk, including loss of principal. Before making any financial decision, consult a qualified professional about your specific situation.