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 fixed withdrawals, 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. |
| Withdrawal type | Either a fixed dollar amount or a percentage withdrawal rate. |
| Withdrawal frequency | How often withdrawals are taken: weekly, bi-weekly, monthly, quarterly, or annually. |
| Inflation rate | Optional input used to show future balances in today’s dollars. |
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 a fixed withdrawal amount and frequency.
Example: $2,500 per month
Example: $2,500 × 12 = $30,000 per year
The user enters an annual withdrawal rate. The calculator applies that rate to the portfolio value when withdrawals begin.
Example: $500,000 × 4% = $20,000 per year
Then the calculator converts that annual amount into the selected withdrawal frequency.
Example (monthly): $20,000 ÷ 12 = $1,666.67 per month
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 end of the selected retirement period, the calculator reports the estimated depletion timing. If a period would end below zero, the implementation treats depletion as occurring partway through that period (a practical approximation for a fixed-withdrawal schedule).
The calculator tracks the portfolio balance after each withdrawal period. If the portfolio remains above zero through the full retirement period, the calculator reports that the portfolio lasts for the full period.
If the portfolio reaches zero during the modelled period, 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, the calculator reports the estimated ending balance as the balance after the final modelled period.
If the portfolio is depleted before the end of the period, the ending balance is shown as $0, and the calculator reports when depletion occurs.
The inflation toggle does not change the withdrawal projection. It only adds a second value showing the future portfolio balance in today’s dollars.
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 fixed nominal 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.
No. In this version, inflation does not automatically increase withdrawals each year. The inflation input only adjusts displayed future balances into today’s dollars.
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 inflation-indexed spending.
Disclaimer: This page describes educational methodology only. It is not financial, tax, legal, or investment advice.