🌅 TOOL · What could this become?

Living off it

Growing a pot and living off one are different games. Once you're drawing money out, a bad run early can drain you in a way the same run later never would — that's sequence risk. This runs 600 retirements to show how likely your pot is to go the distance.

How it works

1 You describe the pot and the incomeWhat you have now, what you take out each month, the return you are assuming, and how long it has to last.

2 We run 600 retirementsEach month the pot earns its (bumpy) return and you take your withdrawal. If it ever reaches zero, that future has run dry — there is no recovering from empty.

3 We count how many go the distanceThe headline is simply the share of those 600 that still had money at the end.

The withdrawal never changes, and that flatters the answer. You take the same cash amount every month for the whole period, so its buying power falls year after year. Real spending rises with inflation, and a plan that keeps pace is materially harder to sustain than the one modelled here.

“Withdrawal rate” is where you start, not where you stay. It is this year’s income as a share of today’s pot. Because the withdrawal is a fixed amount, that rate climbs as the pot shrinks — which is exactly what makes a bad early run so dangerous.

Read the big percentage first. “If unlucky, runs dry” describes only the futures that ran out. If 9 in 10 survive, that year comes from the earliest failures among the unlucky tenth — not from a 1-in-10 outcome overall.

What this can’t tell you

Drawing an income is the situation where a model is least able to stand in for advice.

Inflation is not modelled, and it is the biggest omission. The withdrawal stays flat in cash terms, so in the later years it buys noticeably less. A plan that raises the income each year to keep pace fails far more often than the figure shown here.
“If unlucky, runs dry” only counts the futures that ran dry. When most survive, that year describes the earliest failures among a small minority — not a one-in-ten outcome. Read it next to the headline percentage, never on its own.
It assumes you never change what you take out. In reality most people spend less after a bad year, and that flexibility is the single strongest defence against running out — none of it is captured here.
No tax, fees, state pension or other income. Nothing else is paying in, and nothing is coming off. Real retirements have several of each, pulling in both directions.
Luck is drawn from a bell curve. Real markets crash harder and in clusters, and it is a cluster arriving in the first few years — exactly when the pot is largest and you are selling into it — that does the damage.
It cannot tell you your assumed return is realistic, and a pot you are living off is the worst place to find out you were optimistic.
This is not retirement advice. It is arithmetic for building intuition about one lever — what you take out — which happens to be the lever most under your control.

The thinking behind it

Drawing down reverses the sequence

READ →

Change one assumption at a time — a bit more each month, a few more years, a calmer return — and see the plans side by side.

My scenarios →