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Savings Withdrawal Calculator

Given a balance earning a monthly-compounded return, computes how many months a fixed monthly withdrawal lasts (and the total withdrawn and interest earned), or the level monthly withdrawal that exhausts the balance over a chosen number of years, plus the interest-only withdrawal that preserves the balance forever.

When to use

You are drawing down savings, a retirement account or an inheritance and want either the depletion date for a given withdrawal or the affordable withdrawal for a given period.

Do not use when: You want the required portfolio for a withdrawal rate (use fire-number) or are still accumulating (use retirement-savings or compound-interest).

Formula

i = annual_return_percent/1200. Duration: months = −ln(1 − i × balance / monthly_withdrawal) / ln(1 + i), rounded up (balance / withdrawal if i = 0); no finite duration if monthly_withdrawal ≤ balance × i. Sustainable withdrawal over n = 12 × years months: W = balance × i / (1 − (1 + i)^−n).

Ordinary-annuity arithmetic: interest is credited monthly on the remaining balance and withdrawals are taken at month end (the same formula as a loan payment with the roles reversed). Returns are assumed constant; inflation and taxes are ignored.

Inputs

ParameterTypeUnitRequiredDescription
balancenumberyesAmount available at the start. Range: > 0, ≤ 1000000000000
annual_return_percentnumber%yesNominal annual return in percent, compounded monthly. Range: ≥ 0, ≤ 50
monthly_withdrawalnumbernoFixed amount withdrawn at the end of every month; enables the how-long-it-lasts result. Range: > 0, ≤ 1000000000
yearsnumberyearsnoEnables the sustainable monthly withdrawal that empties the balance after exactly this many years. Range: > 0, ≤ 100

Outputs

OutputTypeUnitDescription
perpetual_monthly_withdrawalnumberbalance × annual_return_percent / 1200: taking only this each month never touches the principal.
months_lastingintegermonthsNumber of monthly withdrawals until the balance is exhausted (includes the smaller final one); only for monthly_withdrawal.
durationstringmonths_lasting in years and months, or 'indefinitely' when the withdrawal does not exceed monthly interest.
total_withdrawnnumberSum of all withdrawals until depletion.
total_interest_earnednumbertotal_withdrawn − balance.
final_withdrawalnumberThe last, usually smaller, withdrawal that empties the account.
sustainable_monthly_withdrawalnumberLevel withdrawal that exhausts the balance after exactly `years` (only when years is given).
sustainable_total_withdrawnnumbersustainable_monthly_withdrawal × 12 × years.

Example

500,000 at 5 %, withdraw 3,000 per month: {"balance":500000,"annual_return_percent":5,"monthly_withdrawal":3000} → {"perpetual_monthly_withdrawal":2083.33,"months_lasting":286,"duration":"23 years 10 months","total_withdrawn":855427,"total_interest_earned":355427,"final_withdrawal":427}

300,000 at 4 % to last 20 years: {"balance":300000,"annual_return_percent":4,"years":20} → {"perpetual_monthly_withdrawal":1000,"sustainable_monthly_withdrawal":1817.94,"sustainable_total_withdrawn":436305.84}

GET https://tttkmbb.com/api/v1/calculate/savings-withdrawal?balance=500000&annual_return_percent=5&monthly_withdrawal=3000

Machine access

Sources

FAQ

Why does the money last so long at 5 %?

Interest on 500,000 at 5 % is about 2,083 per month, so a 3,000 withdrawal only draws the principal down by about 917 at first; the drawdown accelerates as the balance and its interest shrink.

Should I use a real or nominal return?

If the withdrawal should keep its purchasing power, enter a real return (nominal minus inflation) and treat the withdrawal as today's money; otherwise the fixed nominal withdrawal buys less each year.

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