Retirement Income Calculator
What your portfolio pays in retirement.
Calculate retirement income from your portfolio using safe withdrawal rates, with year 1, year 30, and cumulative totals plus inflation.
What this tool does
This calculator models how much income a retirement portfolio can generate each year, based on a chosen withdrawal rate and inflation assumptions. It takes your starting portfolio value, applies a safe withdrawal rate to determine year-one income, then adjusts that amount upward each year to reflect inflation. The result shows your first-year monthly and annual income, what you'll draw in your final retirement year, and the total amount withdrawn across all years. The calculation assumes your withdrawal rate remains consistent and inflation applies uniformly throughout retirement. This is a simplified illustration and does not account for investment returns, market volatility, tax treatment, or changes in spending patterns over time.
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Once you have a retirement portfolio, the question becomes: how much income can you safely draw? The 4% rule suggests 40,000 annually per 1 million. With inflation adjustments, the figure grows each year. This calculator shows year-1 income and inflation-adjusted projections.
1,000,000 portfolio at 4% withdrawal with 2.5% inflation over 30 years: year 1 income 40,000 (3,333 monthly), year 30 income 81,800, cumulative 1.86 million drawn over retirement. Higher portfolio = higher income directly.
The calculation assumes the 4% rule holds - portfolio sustains 30+ years. For longer retirements (early retirement, 40+ years), reduce to 3.25-3.5% for more safety. For shorter retirement (late retirement or high pension income), 5% may be sustainable. Match withdrawal rate to horizon and risk appetite.
Run it with sensible defaults
Using portfolio value of 1,000,000, safe withdrawal rate of 4%, retirement years of 30, annual inflation of 2.5%, the calculation works out to 40,000.00. The defaults are meant as a starting point, not a recommendation.
The levers in this calculation
The inputs — Portfolio Value, Safe Withdrawal Rate, Retirement Years, and Annual Inflation — do not pull with equal force. The rate and the time horizon usually dominate — compounding means a small change in either reshapes the final figure more than a similar shift in contribution size. Test this by doubling one input at a time.
How the math works
Year 1 income = portfolio × withdrawal rate. Subsequent years grow at inflation. Cumulative = sum of inflated annual incomes.
Why the number matters
Saving without a target is like driving without a destination — you'll make progress, but you won't know when you've arrived. This tool gives you a concrete figure to work toward, which is the first step in turning a vague intention into an actual plan.
What this doesn't capture
The calculation assumes a steady savings rate and a stable interest rate. Real saving journeys include emergencies, windfalls, and rate changes — especially in easy-access products. The figure is a direction of travel, not a guarantee.
££1,000,000 at 4% over 30 yearsyrs with 2.5% inflation = 40,000.00.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
The calculator computes first-year retirement income by multiplying your portfolio value by the safe withdrawal rate, expressed as a percentage. In subsequent years, the annual income amount is increased by the annual inflation rate to preserve purchasing power. The total cumulative income across all retirement years is derived by summing these inflation-adjusted annual payments. The model assumes a constant withdrawal rate and a constant inflation rate throughout retirement. It does not account for investment returns on the remaining portfolio, fees, taxes, variations in inflation, or changes in spending needs. This approach models a simple draw-down strategy where withdrawals increase with inflation regardless of portfolio performance.
References
Frequently Asked Questions
Does 4% really work?
What about sequence of returns risk?
Is cumulative income the right planning figure?
Why does the calculator not show how long my portfolio will last?
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