Rich, Broke or Dead Retirement Calculator

What This Calculator Does

The Rich, Broke or Dead Retirement Calculator helps you visualize the probability of your retirement savings lasting through your lifetime. By using real historical market data and actuarial life expectancy, this tool offers a fast, informative way to gauge whether your nest egg can support your planned lifestyle or if adjustments are needed. With just a few entries, you receive a clear, data-driven assessment of your financial future after retirement.

How to Use This Calculator

1. Enter your Savings at Retirement, which is the total amount you expect to have saved by the time you retire.
2. Input your planned Annual Spending during retirement, reflecting your yearly expenses including housing, food, travel, healthcare, and entertainment.
3. Specify your Retirement Age and the Years in Retirement you wish to plan for. If unsure, estimate based on your desired retirement lifestyle and health outlook.
4. Select your Biological Sex, as this affects life expectancy calculations.
5. Enter your Average Tax Rate to account for taxes you expect to pay on withdrawals or income.
6. Add any expected Investment Fees as a percentage, reflecting managed account or fund fees that reduce your net returns.
7. Optional: use the Spending Reduction slider to specify how much you could cut annual spending in a downturn, and the accompanying Flexibility Threshold field to choose the portfolio level (as % of the initial balance) that triggers that cut.
8. Include any Additional Income Streams such as pensions, Social Security, rental income, or part-time work to supplement your savings.
9. The results panel updates instantly—watch your Chance of NOT Going Broke and Life Expectancy change as you tweak the inputs.
10. Review your results and explore how changes to your inputs affect your retirement sustainability.

Definitions of Key Terms

Savings at Retirement

The total amount of money you have saved by your retirement date. This includes 401(k)s, IRAs, brokerage accounts, savings accounts, and any other investment vehicles.

Annual Spending

The amount of money you expect to spend each year in retirement. This should include regular living expenses, discretionary spending, and an allowance for unexpected costs.

Retirement Age

The age at which you plan to stop working full-time and start drawing down your retirement savings.

Years in Retirement

The number of years you want your savings to last after you retire. This is typically your estimated lifespan minus your retirement age.

Biological Sex

Your biological sex, used to estimate your life expectancy based on actuarial tables.

Average Tax Rate

The average percentage of your withdrawals or retirement income that will go toward paying taxes. This helps reflect your true, after-tax spending power.

Investment Fees

The total percentage of your portfolio lost to management or fund fees each year. Even small fees can erode your returns over the long term.

Spending Reduction

The percentage cut you are willing to make to your annual spending when your real portfolio value sinks below the Flexibility Threshold.

Flexibility Threshold

The portfolio balance—expressed as a percentage of your starting balance—that triggers the Spending Reduction. For example, 80 % means you will cut spending once the inflation-adjusted balance dips below 80 % of the initial amount.

Additional Income Streams

Any reliable income you expect to receive during retirement in addition to your savings, such as Social Security, pensions, annuities, or part-time work.

Chance of NOT Going Broke

The share of historical market paths in which your portfolio never reaches $0 over the entire retirement horizon you selected.

Life Expectancy

In this tool it is simply your chosen Retirement Age + Years in Retirement. The engine overlays actuarial mortality probabilities in the charts, but the Life Expectancy number itself comes from your input.

Calculation Methodology

Behind the scenes the model replays rolling historical cycles of market data rather than randomly generating returns. Up to 100 sequences of actual annual stock and bond returns from 1926–2023 are treated as potential future paths. For every year in each cycle the engine: (1) adds any income streams you entered, (2) subtracts spending (optionally reduced when your real balance drops below a user-defined threshold), (3) applies taxes and investment fees, and then (4) grows the remaining balance by the asset-weighted portfolio return for that specific historical year. Actuarial survival probabilities by sex and age are tracked in parallel to show the likelihood of being alive ("Dead" in the chart). The headline success metric shown in the results is the share of historical cycles in which the portfolio never reaches $0 during the entire time-horizon you specified.

Initial setup
  savings   = user-entered "Savings at Retirement"
  age       = retirement age

For each historical cycle (max 100 starting years):
  balance = savings
  For each year of retirement horizon:
    income  = sum of active income streams for this age
    spending = annual spending (reduced if real balance < threshold)
    taxes   = (income + spending) * tax rate
    fees    = balance * fee rate
    return  = portfolio-weighted market return for this historical year

    balance = balance * (1 + return - fee rate) - (spending + taxes - income)

    If balance ≤ 0 ➜ mark cycle as "broke" and stop processing it

After all cycles:
  Chance of NOT Going Broke = cycles that never hit $0  / total cycles * 100%
  Survival probability for each age = product of (1 – annual mortality rate)

Practical Scenarios

• Early Retirement: Suppose you plan to retire at 55 with $800,000 saved, spend $45,000 annually, and have a part-time income of $8,000 per year. Enter these values to assess if your savings can last through your longer retirement period.
• Late Retirement with High Spending: If you aim to retire at 70 with $1,200,000, expect to spend $70,000 annually, and have no pension, the calculator will show how increased spending and a shorter retirement horizon affect your chance of not going broke.
• Accounting for Social Security: A 65-year-old entering $500,000 in savings, $35,000 annual spending, and $18,000 in Social Security income can see how much this stable income boosts the success rate.
• Market Volatility Planning: By adjusting the flexibility threshold, you can see how a willingness to cut expenses during poor market years greatly improves your probability of financial success.

Advanced Tips & Best Practices

• Model different withdrawal strategies (like the 4 percent rule or variable withdrawals) by changing your annual spending and flexibility threshold to see how adaptive spending improves your odds.
• Include all relevant income streams, such as part-time work or annuities, to get the most accurate picture of your retirement sustainability.
• Adjust your investment fees to reflect low-cost index funds versus actively managed funds. Lower fees can have a dramatic positive effect over decades.
• Experiment with different retirement ages to see how working a few more years can significantly increase your probability of not running out of money.
• Review results annually and update your inputs as your spending, savings, or tax situation changes to maintain an up-to-date view of your retirement outlook.

Frequently Asked Questions (Optional)

Does this calculator guarantee I will not run out of money?

No, the calculator uses historical data and probabilities to estimate your chances based on your inputs. While it provides a data-driven forecast, actual results may vary due to future market performance, inflation, health events, or changes in your spending.

How accurate are the life expectancy and market return estimates?

Life expectancy is based on the latest actuarial tables for your biological sex and age, while market returns use decades of actual performance data. These estimates provide a solid basis for planning but cannot predict individual outcomes with certainty.

Can I use this calculator if I plan to retire in a different country or currency?

Yes, but you should adjust all monetary inputs and tax rates to reflect your local currency and tax situation. The calculator's methodology applies globally, though results will be most accurate when local economic conditions are considered.