Portfolio Drawdown Calculator

How long the money lasts

A 500,000 portfolio paying out 30,000 a year and growing at 5% lasts 37 years on this model. Drop the return to 4% and it lasts 29 years; at 3% it lasts 24. The pot and the withdrawal have not moved. Only the assumption has, and it is the one number in the calculation nobody can check in advance.

Why the return assumption dominates

The reason the return dominates is that it works on the whole remaining balance while the withdrawal is a flat amount. Early on, 5% of 500,000 is 25,000 against a 30,000 draw, so the balance falls slowly. As it falls, the growth falls with it and the same 30,000 takes a larger bite, which is why depletion accelerates rather than running at a steady pace.

The point where growth matches the draw

There is a point where the two cancel out. At the defaults the withdrawal is exactly 6% of the portfolio, so a 6% return covers the draw precisely and the balance never moves: the tool reports Forever. That is a knife edge rather than a comfortable margin. At 5.99% the same portfolio lasts 110 years, at 5.9% it lasts 72, and at 5% it lasts 37. The word Forever appears the moment the return reaches the withdrawal rate and not a fraction before it, so a result sitting near that boundary is far more fragile than it looks.

What a flat withdrawal misses

The withdrawal is flat in nominal terms, which is the model's largest simplification. A retirement drawing the same figure in year one and year thirty is drawing far less in real terms by the end, and this calculation makes no adjustment for that. The BIS maintains consumer price series for more than 60 countries, some running back to the mid-19th century, which is where a sense of how far prices drift comes from. Raising the withdrawal each year to keep pace would shorten every figure on this page.

The return is also a single fixed number, which no portfolio delivers. Long-run returns are measured asset by asset and country by country rather than as one figure: a dataset covering 16 advanced economies from 1870 to 2015 assembles total returns for equity, housing, bonds and bills. Separately from that evidence on levels, the order in which returns arrive matters as well as their average, since a poor run early in a drawdown takes its losses from a larger balance than the same run later would. This model has no ordering at all, so it cannot show that effect.

What the calculator leaves out

• Inflation, so the withdrawal stays flat in nominal terms and shrinks in real ones
• The order returns arrive in, which a single fixed rate cannot represent
• Tax on withdrawals, and where the portfolio is held
• Platform, fund and adviser fees, which come off the return
• Any change in the withdrawal, whether chosen or forced
• State or workplace pension income arriving partway through

For educational illustration only

This calculator runs one balance forward at one fixed rate, taking one fixed amount out each year until nothing is left. Every input is held constant for the whole period. The output is a single arithmetic path, useful for seeing how sensitive the answer is to the return assumed, rather than a projection of how a drawdown would actually run.