Withdrawal plan calculator
The question at the end of saving is the opposite of the one at the start. Not how much becomes of this, but how long does this last if I take out a fixed amount every month.
Withdrawal plan
- The money lasts
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- You could take forever
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- Paid out in total
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How to use it
Enter what you have, what you want to take each month and what the remaining capital still earns. The calculation runs month by month, because the point at which the money runs out rarely falls on a year end.
An example
Bernd retires with 400,000 euro and takes 1,500 a month while the rest earns 4 percent. The money lasts about 55 years. At 2,000 a month it lasts 27 years, and at 2,500 it is gone after 19.
What the result leaves out
A steady return every year is the friendliest possible assumption. A bad first decade while you are already withdrawing does far more damage than the same decade later, because you sell more shares to get the same amount.
Questions people ask
It is the monthly return on the capital, so you never touch the capital itself. It ignores inflation, which means it stays the same number while prices do not.
It says you can take four percent of the starting capital in year one and raise it with inflation after that. It came from US market history over 30 years and is a rule of thumb, not a guarantee.
Planning to hit zero on your final day leaves no room for living longer than expected. Most people keep a buffer or plan to leave the capital intact.