Retirement Withdrawal Calculator

1. Enter your starting balance, the savings pot you begin with.
2. Enter the monthly withdrawal you plan to take.
3. Enter the annual return the balance earns.
4. Read how long it lasts, plus the total withdrawn.

Here is what each result means:

A retirement withdrawal plan is the opposite of saving. Instead of adding money each month, you draw money out of a pot while whatever is left keeps earning a return. The key question is how long the savings will last before they run out, which depends on how much you take, how big the pot is and what return it earns.

Interest works in your favour here, slowing the drain. If your withdrawals are small relative to the return, the interest earned each month can cover much of what you take, so the pot lasts far longer than simply dividing the balance by the withdrawal would suggest. In some cases the interest fully covers the withdrawal and the money lasts indefinitely.

This is the maths behind drawdown pensions and the well-known idea of a safe withdrawal rate. It helps you test whether a planned monthly income is sustainable, and see how a smaller withdrawal, a larger pot or a higher return would extend how long your savings support you.

It uses the annuity depletion formula, allowing for interest on the falling balance.

1. Convert the annual return to a monthly rate by dividing by 12.
2. If the withdrawal is at or below the first month's interest, the pot lasts indefinitely.
3. Otherwise, apply the depletion formula to find the number of months.

For the saving side, see the savings goal calculator and the compound interest calculator.

You have 100,000 saved, withdraw 1,000 a month, and earn 6 percent a year.

Calculation: the monthly rate is 0.5 percent, so the first month earns 500 in interest. Since 1,000 is more than 500, the pot shrinks and lasts about 11 years and 7 months. Withdrawing only 500 a month instead would exactly match the interest, and the money would last indefinitely.

Interest on the remaining balance slows the drain.

Simply dividing the balance by the withdrawal understates how long the pot lasts, because it ignores the interest still being earned. At a 6 percent return, that interest adds several extra years before the money runs out.

Drawdown is the mirror image of building savings.

The same annuity maths runs in both directions. In the saving phase deposits and interest build the balance; in the withdrawal phase interest partly offsets what you take out, which is why a sustainable withdrawal can last for decades.

The Withdrawal Amount

A larger monthly withdrawal drains the pot faster and shortens how long it lasts.

The Return

A higher return earns more interest each month, which extends the life of the savings.

The Starting Balance

A bigger pot both lasts longer and earns more interest along the way.

Planning Drawdown

Test whether a planned monthly income will outlast your retirement.

Checking a Safe Rate

See how long a pot lasts at different withdrawal levels.

Any Depleting Fund

Work out how long any savings pot lasts under regular withdrawals.

1. Ignoring Interest

Dividing the balance by the withdrawal understates how long the money lasts, since the balance keeps earning.

2. Forgetting Inflation

A fixed withdrawal buys less over time. You may need to raise it, which shortens the pot's life.

3. Assuming a Steady Return

Real returns vary year to year. A run of poor early returns can drain a pot faster than an average suggests.

4. Overlooking Tax

Withdrawals may be taxed, so the amount you can actually spend is lower.

5. Setting Withdrawals Too High

If the withdrawal far exceeds the interest, the pot can empty surprisingly quickly.

The depletion formula is exact for the assumptions; real drawdown depends on variable returns, inflation and tax.

It depends on the balance, the monthly withdrawal and the return. With 100,000, taking 1,000 a month at 6 percent, the money lasts about 11 years and 7 months.

It applies the annuity depletion formula, allowing for interest on the falling balance, to find how many months of fixed withdrawals the pot supports.

Because the remaining balance keeps earning interest, which offsets part of each withdrawal. That interest can add several years compared with ignoring it.

When the monthly withdrawal is at or below the interest the balance earns. Then interest covers the withdrawal and the pot never runs out under fixed assumptions.

Use a realistic, conservative annual return for how the pot is invested. Cautious drawdown plans often assume a modest figure to allow for poor years.

No. Withdrawals are fixed in today's money. Since prices rise, you may need to increase withdrawals over time, which shortens how long the pot lasts.

It is the maths behind such rules. The 4 percent rule is a guideline for a starting withdrawal; this tool shows how long any withdrawal level lasts at a given return.

No. Withdrawals may be taxed depending on the account and your situation, so the amount you can actually spend may be lower.

No. The calculation runs in your browser and nothing you enter is stored or sent anywhere, unless you choose Save, which keeps the result only on this device.

• Annuity (Wikipedia).
• Trinity study (Wikipedia).
• Withdrawal rate (Investopedia).