Savings Withdrawal Calculator
With a fixed monthly withdrawal and an annual return, see how many years and months your savings balance will last.
Input Data
Results
At a glance:A savings balance funds fixed monthly withdrawals until spent. Each month the balance grows by the monthly return and then the withdrawal is taken. The calculator counts the months to depletion and reports years, extra months, withdrawals, total withdrawn and interest earned.
Formula
Monthly rate = annual rate% ÷ 1200.
Each month: balance = balance × (1 + monthly rate) − withdrawal, until balance ≤ 0.
Years = whole months ÷ 12; extra months = remainder.
$$B_{t} = B_{t-1} \\times \\left(1 + \\dfrac{r}{12}\\right) - W$$How to Use
- Enter the starting savings balance.
- Enter the monthly withdrawal and the annual rate.
- Read how long the savings last and the totals.
FAQ
Why can savings last so long sometimes?
When the monthly withdrawal is close to or below the monthly interest, the balance falls very slowly or not at all, so it lasts a very long time. If the withdrawal is below the first month's interest, in theory the principal never depletes (this tool caps at 100 years to avoid an infinite loop).
Does it account for inflation?
No. It assumes a fixed monthly withdrawal. In reality prices rise, so the purchasing power of a fixed withdrawal falls each year; to maintain your lifestyle the withdrawal must grow with inflation, shortening the lifespan.
Is the withdrawal at the start or end of the month?
This tool uses an end-of-period model (interest first, then withdrawal). With start-of-period withdrawals the balance depletes slightly faster; the difference is small, mainly affecting the last one or two periods.
Why does it last nearly forever when the withdrawal is near the interest?
Each month the balance earns interest (up) and you withdraw a fixed amount (down) — whichever wins decides the lifespan. If withdrawal > interest, the balance net-decreases and eventually depletes; the more it exceeds, the faster. If withdrawal ≈ interest, interest nearly offsets the withdrawal and the balance barely moves, lasting decades. If withdrawal < interest, the principal actually grows and can sustain forever — the 'live off the interest' financial-independence idea. Example: HK$100,000 at 5% earns about HK$417 first month; withdrawing only HK$500 (just above) leaves the balance down only ~HK$83 a month, lasting ~36 years; withdrawing HK$400 (below interest) means the principal theoretically never depletes. So the key to sustainable cash flow is the withdrawal rate relative to the return, which is why rules like the 4% rule stress keeping withdrawals at a safe level. Allow a buffer for rate swings and inflation.
Does it account for inflation, and what is the blind spot of a fixed withdrawal in long-term planning?
No — it assumes the monthly withdrawal is fixed. In long-term planning this is a critical blind spot: inflation erodes purchasing power, so HK$5,000 today may only buy what ~HK$2,700 buys in 20 years at 3% inflation, even though the cheque is still HK$5,000. A 'lasts 30 years' result can overstate real security because the same nominal amount buys less later. Practical fixes: let the withdrawal rise with inflation (but that shortens the lifespan materially); use a conservative real return (nominal minus inflation); reserve extra buffer for rising medical/long-term-care costs; and review the plan periodically. Use this for the basic mechanism and sensitivity, but fold inflation into real planning and seek professional advice. Pair with the Retirement Withdrawal and FIRE calculators.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.