What this savings withdrawal calculator does
This calculator finds your monthly withdrawal from savings. You enter a balance, a return, and a number of years. The tool then works out a level amount. So you can draw the balance down to zero. The rest keeps earning while you draw. The result is shown in your currency.
How a drawdown works
A drawdown turns a lump sum into income. You take a set amount each month. The balance shrinks as you withdraw. But it still earns a return meanwhile. So the earnings stretch the money further. The plan ends when the balance hits zero.
How it is calculated
The tool takes your savings balance. It spreads it over the months you choose. It allows for the return still earned. So the monthly amount stays level throughout. The result is your monthly withdrawal. The calculator works it out for you.
What the result tells you
The result shows your monthly withdrawal. A balance of two hundred thousand over fifteen years gives about one thousand five hundred. A bigger balance raises it. A longer term lowers it. So it shows steady income from savings. It is just a close estimate.
The savings balance
Your savings balance is the lump sum you start with. It is the pot you will draw from. A bigger balance means a bigger monthly amount. So this number sets the scale. Use the amount you have saved. It is the base of the whole plan. Enter your savings balance.
The annual return
Your annual return is what the balance earns. The leftover money keeps growing as you draw. A higher return lifts the monthly amount. So the earnings help the pot last. Use a rate you can expect to earn. Returns are never promised. Enter your annual return.
The years to draw down
The years to draw down set how long it lasts. They spread the balance over that time. More years mean a smaller monthly amount. So a longer plan stretches the money. Pick a span that fits your needs. The balance ends at zero. Enter your years to draw down.
The interest you still earn
The pot keeps earning interest as it shrinks. So you draw out more than you put in. Here the balance pays out well over the start. The extra comes from the return earned. A higher return adds more interest. A longer plan earns more too. This is why the money lasts.
How to use it
Enter your savings balance first. Add the return and the years. Read the monthly withdrawal in the currency you choose. Then try a longer span. See how the amount shifts. Compare a few plans. Use it to plan your income.
The limits of this calculator
Keep its limits in mind. It uses a steady return only. Real returns rise and fall. It ignores tax on withdrawals. It assumes the balance ends at zero. So take it as a ballpark. So review the plan often.
A final tip
Use this to plan steady income from savings. Remember real returns will vary. Leave a buffer for bad years. Check the plan as markets move. Allow for tax on what you draw. Do not draw faster than planned. A careful plan guides your spending.