What this result means
Spending Capacity asks the inverse of money longevity: given a portfolio, a retirement age, and a plan-through age (default 95), roughly how much annual spending could the portfolio support under fixed return and inflation assumptions? The free calculator uses the annuity-real method — constant purchasing-power withdrawals — which matches the primary solver inside a free account.
The headline combines portfolio withdrawal with optional outside income so you see total household spending capacity in today’s dollars (annual and monthly). That is still a fixed-assumption estimate, not a guarantee that markets will cooperate, and not a claim that this is the amount you “should” spend.
If you already know what you want to spend and need a depletion age instead, use How long will my money last? rather than forcing this page to answer that question.
What can change the answer?
- Horizon: More years of draws (earlier retirement or later plan-through age) lowers sustainable spending.
- Portfolio size and real return: Larger balances and higher assumed real returns raise capacity — with uncertainty attached.
- Outside income: Social Security and pensions add to total spending without increasing the portfolio draw.
- Ending balance: Leaving an inheritance or cushion reduces what you can spend along the way.
- Inflation: When spending is held in today’s dollars, inflation assumptions affect the path of nominal withdrawals.
How the calculation works
We solve for a constant real withdrawal from the portfolio over the years from retirement to your
plan-through age, then add optional outside income to the displayed total. The math is the same
annuity_real path used in Projections → Spending Capacity — not the stress-test binary
search that scales spending until a full household projection survives. Details:
Spending Capacity methodology.
Enter the portfolio you expect at retirement (or today’s balance if you are already retired and set retirement age equal to current age). Pre-retirement growth is your responsibility on this free page; the full planner can model contributions year by year before the draw phase.
Example: turning capacity into a stress-test input
Imagine the solver says about $78,400 per year (~$6,530 per month) through age 95 including $30,000 of outside income. That means the portfolio piece is roughly $48,400 of real withdrawals. The useful next step is not to treat $78,400 as destiny — it is to ask whether that lifestyle still looks reasonable when markets are bad. Carry a similar spending level into the Monte Carlo calculator or Historical calculator, or run the 2-Minute Stress Test for a combined view.
How this page differs from our other free tools
- Money longevity — fixed spend, solve for how long money lasts.
- Monte Carlo — tests a chosen spend across randomized markets.
- Historical — tests a chosen spend across actual past sequences.
- Can I retire at 60? — case study that combines baseline, Monte Carlo, and historical for an early-retirement example.
Important limitations
This page does not model income taxes, RMDs, or account-specific withdrawal order. It does not optimize Social Security claiming. A free account unlocks other withdrawal methods, scenario-linked portfolios, and market stress tests on your actual plan. Educational projections only — not financial advice.
See how a full household looks in Jim & Susan’s sample plan, or build your free plan when you are ready to replace the combined-portfolio shortcut.