What does a retirement drawdown calculator show?
A drawdown scenario shows how a starting balance changes as withdrawals are taken over time under stated assumptions. This calculator applies one fixed monthly withdrawal and one constant effective annual return that you enter. It reports a modeled balance path, and if the balance runs out, the unpaid portion of that month’s scheduled withdrawal.
The calculation is intentionally narrow. It does not estimate a safe withdrawal amount, decide when you can retire, or predict an individual’s lifespan or investment returns. FINRA’s retirement calculator is a separate tool that includes accumulation and decumulation and models savings needed to fund withdrawals over a selected period. The simple scenario on this page does not reproduce FINRA’s tax, savings, or income features. Source: FINRA Retirement Calculator, accessed 2026-11-03.
How is the monthly balance calculated?
The annual return is treated as an effective annual rate. It is converted to a monthly rate that compounds to the same annual rate: (1 + annual rate)1/12 − 1. For each month, the calculator applies that monthly rate to the opening balance, then subtracts the scheduled withdrawal. This ordering represents a withdrawal at month-end. No deposit or other cash flow is modeled.
For example, with a zero return, a $120,000 starting balance and a $1,000 monthly withdrawal lasts 120 modeled months, or 10 years. That arithmetic example assumes every scheduled withdrawal is paid at month-end and excludes all other changes. It is not a recommendation for a withdrawal amount.
What happens when the balance is depleted?
If the balance after the month’s assumed growth is smaller than the scheduled withdrawal, the model pays only the available amount, sets the next balance to zero, records the unpaid remainder as a shortfall, and stops. The depletion month is therefore the first month when the entered schedule cannot be fully met under the formula. If no shortfall occurs, the remaining period continues and the result shows the ending balance.
A smooth assumed return can hide the effects of real market variation. Actual returns can vary from month to month, and the order of gains and losses can affect a portfolio from which withdrawals are being made. Inflation can also change what a fixed dollar withdrawal buys. This page has no historical return data, probabilistic simulation, inflation adjustment, income sources, investment allocation, taxes, or fees.
Use the output only to inspect the assumptions you entered. Compare multiple scenarios by changing one input at a time, and consult current account statements and qualified financial or tax professionals for decisions involving your circumstances. This educational calculator is not financial advice.
Frequently asked questions
Does the result predict how long my savings will last?
No. It is a deterministic calculation with a fixed monthly withdrawal and constant return assumption. It does not predict actual returns, inflation, lifespan, or future spending.
Is the entered annual return guaranteed?
No. It is an assumption supplied by the user. Actual investment returns may be different and can vary over time.
When is each monthly withdrawal taken?
The model applies one month of assumed growth first and subtracts the withdrawal at month-end. Different timing would produce a different path.
Does this calculate a safe withdrawal rate?
No. It accepts a fixed monthly amount and shows the arithmetic path under the entered assumptions. It does not test historical sequences or determine a suitable withdrawal.