You have retired, or you are close to it. The money is sitting there and you need to draw a salary from it every month. The only question that matters is whether it lasts.
This works that out, and if the answer is no, it tells you the two things you can change. Taking money out this way is often called an SWP, a systematic withdrawal plan.
What is left, year by year
One bar for each year. Pale bars are years with nothing left.
If it does not last, change one of these
Only two of these are really your choice.
The Assumption Most Calculators Hide
Most withdrawal calculators let you take out the same amount every month for thirty years. That is not retirement. That is thirty years of quietly getting poorer.
Set the yearly rise to zero above and the money suddenly lasts forever. Put it back to six per cent and the same savings run dry years earlier. Nothing about the money changed. Only the honesty of the assumption did.
Three Things Worth Knowing
- Growth is not a lever. You can take out less, or start with more. You cannot decide what the market pays you. Any plan that only works at a high growth rate is not a plan.
- Bad years hurt most at the start. This works on a steady average, which real markets never give you. A poor first few years, while you are also taking money out, does far more damage than the same years later on.
- Tax is not counted here. What you withdraw from a fund is part capital and part gain, and the gain is taxable. The real amount you can spend is a little lower than what this shows.
If you are still building the money up rather than living off it, the retirement calculator works out how big it needs to be and what to save each month to get there.
This calculator is for learning. It is not personal financial advice. Growth and the yearly rise are assumptions you choose, not forecasts, and it applies them evenly when real markets do not. It ignores tax on withdrawals and any charges on the fund. For advice about your own retirement income, speak to a SEBI-registered investment adviser.