Withdrawal Plan

The calculator shows how many years a portfolio lasts when a fixed amount comes out every month and the rest stays invested. The inputs are starting capital, monthly withdrawal and expected return.

How the Calculation Works

Each month, the portfolio grows by one twelfth of the annual return, and then the withdrawal is taken out. This repeats until the capital is used up. The number of months until then, divided by twelve, is how long the portfolio lasts.

If the monthly income already covers the withdrawal, the capital never shrinks, and the calculator reports “indefinitely”. That is the case once starting capital × annual return ÷ 12 is at least as large as the withdrawal. The withdrawal rate shows the annual withdrawal relative to the starting capital.

Worked Examples

At a 5% return, €500,000 earns about €2,083 a month. A €2,000 withdrawal stays below that, so on paper the capital lasts indefinitely. Taking out €500 more shortens that to 36 years, €1,000 more to 24 years.

What the Calculator Leaves Out

• Order of returns. The calculator applies the same return every month. If markets fall sharply in the first years of withdrawals, more has to be sold, and the capital sold is missing when prices recover. This sequence risk can shorten how long a portfolio lasts considerably, even at the same average return.
• Inflation. The withdrawal stays the same every year. At 2% inflation, €2,000 buys only as much after 20 years as about €1,350 today. Raising the withdrawal each year empties the portfolio faster.
• Taxes and costs. Selling triggers capital gains tax on the gain portion. The return should already be net of fund costs.

The FIRE calculator works out how large the capital needs to be for a given withdrawal rate. The dividend portfolio calculator looks at living from distributions instead of sales.

More calculators and tools are listed in the tools overview.

Data note 1