Retirement Withdrawal Calculator

Before you enter your numbers

Enter the amount withdrawn from investments, not your entire household spending if a pension covers part of it. Annual withdrawal growth increases the payment after every 12 months. Use this field to approximate rising expenses; a zero setting keeps withdrawals fixed in nominal currency.

• Starting retirement balance
• Monthly withdrawal
• Expected annual return
• Annual increase in withdrawals

Input reference

• Starting retirement balance: The money available when the withdrawal period begins. Subtract any immediate lump-sum spending or reserve you intend to exclude before entering the balance. The model assumes the full entered amount can support payments.
• Annual return: An assumed nominal annual rate, divided by 12 in monthly projections. It is held constant. It is not a guaranteed yield, and the default should be replaced with an assumption suited to your scenario.

Formula and calculation method

Each month the balance earns one-twelfth of the annual return and then pays the withdrawal. After each year, the payment is multiplied by 1 + withdrawal growth. The calculation stops on depletion or after 1,200 months. A 100-year cap means the simulation ended, not that depletion necessarily occurs then.

Worked example

With 120,000, a 1,000 monthly withdrawal, zero return and no annual increase, the money lasts 120 months, or 10 years. At 2,000 monthly it lasts five years. Positive investment returns may extend the period, but increasing withdrawals draws down the fund faster.

How to interpret the result

The result panel reports estimated savings longevity, total withdrawals and the balance remaining after a long retirement period.

The smooth-return path does not reproduce a market crash. With withdrawals, the order of returns matters because money sold after losses cannot participate in a later recovery. Compare a lower return and a higher withdrawal increase, and plan how discretionary spending could respond to a downturn.

What this withdrawal model does—and does not model

The calculator compounds the remaining balance monthly, subtracts the withdrawal, and increases the withdrawal annually by the growth rate you enter. That makes it more realistic than a model that assumes the same nominal withdrawal for 30 years.

It still uses a smooth average return. Real markets are volatile, so two retirees with the same average return can experience different outcomes if poor returns happen early. Use the result as a baseline and test lower returns or higher withdrawal growth as a stress case.

Why return order matters during withdrawals

Consider 100,000 with a 10,000 year-end withdrawal. A 20% loss followed by a 25% gain leaves 77,500 after two withdrawals. Reversing the same two returns leaves 82,000. Without withdrawals, both return sequences finish at 100,000. Selling assets to fund spending creates the difference.

The calculator does not reproduce those variable annual paths; its return is constant. Its result is therefore a baseline to challenge. A spending policy might distinguish an essential minimum from discretionary amounts that can be reduced, but this page does not automatically apply such a policy.

Stress-test a withdrawal instead of trusting one lifespan estimate

A withdrawal that appears sustainable under a constant return can still be vulnerable to poor returns early in retirement. This calculator uses a steady assumed return, so compare a baseline case with a lower-return case and a higher-withdrawal case. The range is more informative than a single projected year when the balance reaches zero.

Also separate discretionary spending from essential spending. If markets fall, discretionary withdrawals may be easier to reduce than housing, food or healthcare costs. That flexibility is not modeled automatically, but it can materially change how a retirement plan behaves in practice.

Test A More Sustainable Withdrawal

If the chosen withdrawal depletes the account too quickly, compare a lower payment with the retirement income calculator or adjust the retirement target in the main retirement calculator. Preserve the same inflation and return assumptions so the comparison remains meaningful.