Time to Exhaust PV
How long a fund lasts when making regular withdrawals.
When to use: Use to find how long retirement savings will last with annual withdrawals.
Formula
Variables
| Symbol | Name | Description | Unit |
|---|---|---|---|
| n | Number of Years | How long the fund lasts | years |
| PV | Present Value | Current fund balance | $ |
| PMT | Payment | Annual withdrawal amount | $ |
| k | Interest Rate | Annual return | % |
Real-Life Examples
Example 1: Retirement Duration
You have $800,000 and withdraw $50,000/year at 5%. How long does it last?
Given
Step-by-Step
Your retirement fund will last about 33 years.
Example 2: Education Fund
$100,000 fund, withdraw $15,000/year at 4%. How long does it last?
Given
Step-by-Step
The education fund lasts about 7.91 years.
Frequently Asked Questions
Enter your current savings as PV, annual withdrawal as PMT, and expected return as k. The formula tells you how many years your money will last. Note: if PV × k ≥ PMT, the fund never runs out because interest covers the withdrawals.
The commonly cited 4% rule suggests withdrawing 4% of your initial balance annually (adjusted for inflation). At typical market returns, this has historically sustained a portfolio for 30+ years. However, individual circumstances and market conditions vary.
If withdrawals exceed interest, you are drawing down the principal. The balance decreases over time until it reaches zero. This formula calculates exactly when that happens.