Turn a nest egg into a monthly income: this calculator estimates what you can withdraw sustainably given your portfolio size, time horizon and expected returns.
Withdrawing too much early is the classic failure mode — a bad market decade at the start of retirement (sequence risk) can exhaust a portfolio that average returns said was safe.
State pensions reduce what your portfolio must provide; estimate yours with the EU Pension tool and subtract it from your income need.
A fixed real withdrawal is a modelling convenience rather than how retirements are actually spent. Real spending typically falls through the middle years and rises again with care costs late on, and a plan that assumes a flat line will understate the early years and the last ones for different reasons.
The largest lever against sequence risk is flexibility rather than precision. Cutting withdrawals modestly in the years after a fall — or holding a cash buffer so units are not sold into one — improves survival rates far more than fine-tuning the initial percentage.
Guaranteed income changes the arithmetic underneath. A state pension or an annuity covering essential spending means the portfolio only has to fund the discretionary part, and a portfolio funding discretionary spending can absorb a bad decade in a way one funding the rent cannot.
Frequently asked questions
How much can I withdraw from my portfolio each year?
The classic starting point is 4% of the initial balance, inflation-adjusted yearly — but the safe figure depends on how long the money must last and what returns you assume. Longer horizons argue for less.
What is sequence-of-returns risk?
The danger of bad market years early in retirement: withdrawals during a downturn lock in losses, and the depleted portfolio may never recover even if average returns later look fine.
How long should I plan for my savings to last?
Plan to at least age 90–95. Underestimating longevity is one of the costliest retirement mistakes, and a longer horizon meaningfully lowers the sustainable withdrawal rate.