Reference formulas and worked examples below keep their stated units. Monetary examples use USD; dimensional examples use US customary units unless labeled otherwise. Metric calculator inputs are converted to these reference units before calculation. Choosing another currency does not convert example amounts or exchange money.
How to use this retirement withdrawal calculator
Monthly spending starts now. Other income offsets that spending from your selected month onward; only the remaining amount is drawn from the portfolio. This is one constant-return scenario, not a success probability.
How the calculation works
Convert the effective annual return to monthly growth: monthly rate = (1 + annual return)^(1/12) − 1. Apply this growth to the opening portfolio, rounded to cents, before each month-end withdrawal.
Month-1 spending is held for 12 months, then increases by the inflation assumption each year. Other income is zero until the chosen starting month; its entered amount is the nominal first payment. Optional inflation increases begin after each 12 months of those payments.
Portfolio withdrawal needed = max(0, monthly spending − other income). Actual withdrawal is capped at the available portfolio. Any amount not funded is recorded as a spending shortfall. Surplus external income is not deposited into the portfolio.
Track both the month the portfolio reaches zero and the first month spending cannot be fully funded. Those dates can differ. Continue the full horizon so income that starts after depletion and remaining shortfalls are still shown.
Annual rows sum the monthly nominal cash flows. Real ending balance = nominal ending balance ÷ (1 + inflation)^(elapsed months ÷ 12). This is a deterministic scenario, not a safe-withdrawal-rate recommendation or a simulated probability.
Worked example
Start with 12,000, spend 1,000 per month, and assume 0% return and inflation. If 500 monthly income starts in month 7, the first six months withdraw 6,000. The remaining 6,000 funds another 12 monthly withdrawals of 500. The portfolio reaches zero in month 18; the first 500 spending shortfall appears in month 19. Over a 24-month plan, total unfunded spending is 3,000.
Limits and assumptions
One account, one constant effective return and one other-income stream. No market-path simulation, probability, investment allocation, taxes, account withdrawal restrictions, required minimum distributions, benefit eligibility, income end date, one-off costs, or automatic spending adjustment is modeled. A year with a shortfall is not repaired by income received later. Inflation and returns are editable assumptions; actual outcomes can differ.
Frequently asked questions
Is monthly spending the same as portfolio withdrawal?
Only when other income is zero. Enter total spending first; the tool subtracts other income before drawing the portfolio, avoiding a double deduction.
Can a pension or other income begin later?
Yes. Enter the month it starts and its expected nominal amount at that first payment. Month 61 is after five years. Benefits, qualification and the starting amount are not calculated here.
What does inflation do to the income?
If you choose inflation-linked income, the first payment is the amount entered and it rises on each 12-month anniversary of its start. Fixed income stays at the same nominal amount. Spending follows its own annual increases from the beginning of the plan.
Why can depletion and a spending shortfall happen in different months?
The last portfolio payment may exactly cover a month before the balance reaches zero. Other income can also cover later spending even with an empty portfolio. The tool reports both events.
Does no shortfall mean this plan is safe?
No. It means this one set of smooth return and cash-flow assumptions funds the tested horizon. Actual market returns, expenses, inflation, taxes and longevity are uncertain.
What happens to income above monthly spending?
It is not reinvested or carried forward in this version. It reduces the portfolio withdrawal to zero for that month.