Use the Retirement Withdrawal Calculator
This page explains the arithmetic behind the Retirement Withdrawal Calculator.
The calculator answers a narrow question:
If a portfolio starts with a given balance, earns a fixed annual return, and supports an initial withdrawal that either rises with inflation or remains fixed, how long does the money last?
It does not model taxes, CPP, OAS, pensions, RRIF minimum withdrawals, account-specific rules, market volatility, or sequence-of-returns risk. It is a simplified drawdown model based on user-supplied assumptions.
The calculator uses the following inputs:
| Input | Meaning |
|---|---|
| Starting portfolio value at retirement | The amount available when the drawdown period begins. |
| Expected annual return | The assumed annual investment return, before withdrawals. |
| Retirement withdrawal period | The number of years to model withdrawals. The engine rounds this to a whole number of withdrawal periods (requested years × periods per year, then rounded), and the displayed horizon is that effective length. |
| Withdrawal type | Either an initial dollar amount or an initial percentage withdrawal rate. |
| Withdrawal frequency | How often withdrawals are taken: weekly, bi-weekly, monthly, quarterly, or annually. |
| Withdrawal adjustment | Whether the initial withdrawal adjusts annually with inflation or remains fixed in nominal dollars. |
| Inflation rate | Used to escalate or reduce withdrawals when inflation adjustment is selected, and to convert displayed future balances into today’s dollars when the real-dollar display is on. Not required when withdrawals are fixed and that display is off. |
The calculator begins with the portfolio value available when withdrawals start. This value is not projected inside the calculator. If a user needs to estimate how today’s savings may grow before retirement, they can use the Simple Investment Calculator first and enter that projected retirement-start value here.
Withdrawals can happen monthly, weekly, bi-weekly, quarterly, or annually. The calculator converts the annual return into a return for each withdrawal period.
Periods per year:
| Frequency | Periods per year |
|---|---|
| Weekly | 52 |
| Bi-weekly | 26 |
| Monthly | 12 |
| Quarterly | 4 |
| Annually | 1 |
Example for monthly withdrawals and a 5% annual return:
The user enters an initial withdrawal amount and frequency.
Example: $2,500 per month
Example: $2,500 × 12 = $30,000 per year
If the starting portfolio is $0, the starting withdrawal rate is undefined and is shown as N/A rather than 0%.
The user enters an initial annual withdrawal rate. The calculator applies that rate once to the starting portfolio value.
Example: $500,000 × 4% = $20,000 per year
The calculator does not recalculate the percentage from later portfolio balances. It converts the initial annual amount into the selected withdrawal frequency, then follows the selected withdrawal-adjustment rule. Rate mode rejects an initial annual rate above 50%; that cap is a model bound, not a claim about a safe rate.
Example (monthly): $20,000 ÷ 12 = $1,666.67 per month
With inflation selected, every withdrawal in the first retirement year uses the initial periodic amount. At the start of each later retirement year, the periodic amount is multiplied by (1 + inflation rate), which can raise or lower it.
Example: an initial $2,000 monthly withdrawal and 2.5% inflation produces $2,000 per month in year 1, $2,050 in year 2, and $2,101.25 in year 3.
With fixed selected, the periodic withdrawal remains the same nominal dollar amount in every year. Its purchasing power therefore declines as prices rise.
For each withdrawal period, the calculator applies investment growth, then subtracts the withdrawal.
This process repeats until one of two things happens:
If the balance reaches zero before the last scheduled withdrawal is fully funded, the calculator reports premature depletion and the estimated timing. If a period cannot fund the full scheduled withdrawal, depletion is timed partway through that period, but the yearly row records the growth actually applied and withdraws the remaining balance so starting + growth − withdrawals = ending = 0. If the final scheduled withdrawal is fully funded and the balance ends at about $0 at the horizon, that is treated as lasting the full period, not as premature depletion.
The calculator tracks the portfolio balance after each withdrawal period. If the portfolio remains above zero through the full retirement period, or funds every scheduled withdrawal and ends at about $0 at the horizon, the calculator reports that the portfolio lasts for the full period.
If the portfolio is depleted before the horizon (the last scheduled withdrawal is not fully funded), the calculator reports the approximate time until depletion, such as: “depleted after approximately 24.6 years”.
If the portfolio lasts through the full selected retirement period — including the case where the last withdrawal is funded and the ending balance is about $0 — the calculator reports the estimated ending balance as the balance after the final modelled period.
If the portfolio is depleted before the horizon, the ending balance is shown as $0, and the calculator reports when depletion occurs.
The “Show inflation-adjusted values” checkbox is a display control. It adds a second value showing the future portfolio balance in today’s dollars. It does not choose the withdrawal path; the separate withdrawal-adjustment setting does that.
Example: $300,000 ÷ 1.025 20 = $183,052
So a $300,000 balance 20 years from now is equal to about $183,052 in today’s dollars if inflation averages 2.5% per year. For a broader walkthrough of inflation and purchasing power, see Inflation: The Math That Makes Future Money Smaller.
The chart shows projected portfolio value by retirement year. The bars show nominal portfolio balance at the end of each retirement year (year 0 is the starting portfolio at withdrawal start).
If the inflation toggle is on, the chart also overlays a line for inflation-adjusted balance at the end of each year, derived from the nominal series.
This calculator is intentionally simplified. It does not include:
The calculator assumes a fixed annual return and either fixed nominal or annually inflation-adjusted withdrawals. Real retirement outcomes can differ materially. For a deeper look at the order-of-returns problem, read Sequence of returns risk.
This calculator can show the result of a withdrawal rate, but it does not prove that the rate is safe. A true safe-withdrawal analysis would need to account for uncertain returns, inflation-indexed spending, taxes, account structure, and the order in which market returns occur.
This calculator shows arithmetic under fixed assumptions. It does not provide financial, tax, legal, or investment advice.
The main projection uses nominal dollars. If the inflation toggle is turned on, the calculator also shows the projected portfolio balance in today’s dollars.
It depends on the withdrawal-adjustment setting. With inflation selected, the initial withdrawal is multiplied by (1 + inflation) at the start of each retirement year. With fixed selected, the nominal withdrawal does not change. The real-dollar display remains a separate control. Rate mode also caps the initial withdrawal rate at 50%.
Withdrawal frequency affects timing. Monthly withdrawals remove money earlier than annual withdrawals, which slightly changes how much remains invested and compounding during the year.
No. It uses a fixed annual return. It does not model good years, bad years, or sequence-of-returns risk.
No. This is a simplified portfolio withdrawal calculator. A full retirement income calculator would need to include taxes, CPP, OAS, pensions, RRSPs, RRIFs, TFSAs, non-registered accounts, and other income and spending changes.
Disclaimer: This page describes educational methodology only. It is not financial, tax, legal, or investment advice.