Savings Withdrawal Calculator


A Savings Withdrawal Calculator is a tool that can give you an idea about the number of payouts, age at the last payout, the amount associated with the final payout, and the total interest earned during withdrawal of savings. There are several parameters that the calculator takes as input to provide the already stated set of outputs. In a nutshell, the calculator helps you gauge the age at which your savings will run out if you plan to start withdrawing money after retirement.

The Savings Withdrawal Calculator is a part of a broader set of calculators that include the Salary Calculator and Pay Raise Calculator. You can get a complete list of the calculators offered by clicking on this link.

Let us take a look at how to calculate Savings Withdrawal, which is what the calculator helps you achieve.

How To Calculate Savings Withdrawals For A Fixed Amount And Period?

First, let us take a look at the various parameters involved in the calculation and then go over a quick example to understand the underlying logic.

Investment At Retirement

As the name suggests, investment at retirement refers to the amount of money you have saved for your retirement. It is the money you are banking on to lead a stress-free life post-retirement. The higher the investment at retirement, the longer the payouts will last.

Age To Retire

As the name suggests, the age to retire is when you plan to stop working and rely on your savings for the rest of your life. The earlier you retire, the higher your savings should be to last you long enough.

Current Age

The purpose of the calculator is to determine how long your investment lasts once you start withdrawing your savings. The longer the gap between the age to retire and your current age, the longer your savings will last post-retirement.

Annual Interest Rate

The annual interest rate is the percentage by which your savings or deposits are growing by every year. A higher interest rate will fetch many payouts, and the longer your investments will last you post-retirement.

Withdrawal Frequency

The withdrawal frequency is the number of times in a year you wish to withdraw money. There are three possible options for this parameter. They are monthly, quarterly, and annually. A monthly withdrawal will lead to a faster savings depletion than a quarterly withdrawal. On similar lines, a quarterly withdrawal will lead to a quicker savings depletion than an annual withdrawal. However, you cannot restrict yourself from depleting your savings. After all, you have saved money all your life to be able to use it post-retirement. A better way to ensure the maximum number of payouts is to make annual withdrawals as opposed to monthly or quarterly withdrawals. For example, a yearly withdrawal of 12,000 dollars returns significantly larger payouts compared to a monthly withdrawal of 1000 dollars, assuming the other parameters remain the same.

First Withdrawal

The first withdrawal and every subsequent withdrawal after retirement is the amount you want to start taking out of your savings at regular intervals. The higher the number and withdrawal frequency, the lesser your savings will last you after retirement. Consequently, you will receive a smaller number of payouts.

Payment Type

There are two kinds of payment types, namely – Beginning of Period and End of Period. It indicates whether you want to withdraw money at the start of a period or the end after the interest has accumulated along with the added annual inflation. Therefore, it makes more sense to withdraw money at the end of a period as the sum of money over which interest accumulates is larger.

As a simple example, consider an initial investment of 100,000 dollars, with an annual inflation rate of 2.5% and a monthly withdrawal of 12,000 dollars. Also, the current age is 54, and the age to retire is 56. The annual interest rate is 12%. For the Beginning of Period payment type, the total withdrawals sum up to 103,841 dollars. For an end of period payment type, the total withdrawals sum up to 104,924 dollars. It’s visible that End of Period payment type fares better than the Beginning of Period payment type.

Annual Inflation Rate

Every year there is an increase in the general price of commodities in an economy. Money in deposits also grows by this fixed percentage. This fixed percentage by which money grows is called the annual inflation rate. Very high inflation will reduce the value of money. However, this field is rarely under the control of the individual, and it is best to find a bank that offers an annual inflation rate on par or close to the country’s inflation rate.

Number Of Payouts

The number of payouts is the first parameter returned by the Savings Withdrawal calculator. It indicates how many withdrawals you can make before running out of money post-retirement.

Age At Last Payout

The second parameter which the calculator returns is the Age at Last Payout. It is calculated based on the number of payouts and the frequency of withdrawals. For example, if there are two payouts, the retirement age is 56 years, and the withdrawal frequency is monthly, the age at the last payout is 56.17 years which is 56 years and two months because there are only two payouts.

Final Payout

If the amount left in the savings is less than the periodic payouts, then the money remaining in the savings account is the final payout as no more payouts are possible after this.

Total Interest Earned

The contribution from the annual inflation rate and yearly interest rate augment the money stored in the savings account. The input gathered from these two parameters is the total interest earned. Once the final payout is made, interest accumulation stops as there aren’t any savings in the account.

Total Withdrawals

The last output parameter is the total withdrawals, which is the sum of the initial investment and the total interest earned throughout the payouts.

Now that we have taken a look at the various parameters of the Savings Withdrawal Calculator let us look at the logic behind the calculator. Consider the initial investment to be 100,000 dollars. The Age to Retire is 56 years, and the current age is 54 years. Let us assume the first withdrawal to be 100,000 dollars. The annual inflation rate is 2.5%, the annual interest rate is 12%, and the payment type is End of Period. First, we need to calculate the annual rate of return for the initial investment. The sum returned by this calculation is then adjusted for inflation, which here is 2.5%. This process is done for the first month. The interest generated is then added to the investment after subtracting the monthly withdrawal, and the process is repeated until the last payout.

If you aren’t a fan of numbers, don’t worry about it. In the background, the Savings Withdrawal Calculator does all the heavy lifting for you. For the above example, skipping the calculations, we get the number of payouts as two, and the total interest earned to be 1,010 dollars. It results in the total withdrawals to be 101,010 dollars.


The Savings Withdrawal Calculator makes the task of calculating the number of payouts on your savings straightforward by doing all the heavy lifting for you. With this information, you can take a call on how long your investment lasts you post-retirement.