How this calculator works
The tool treats your starting principal like a loan you are paying yourself. It finds the fixed monthly amount that draws the balance down to exactly zero by the end of the term, while the money still invested keeps earning the rate you entered each month.
Because the remaining balance keeps growing between withdrawals, the total you receive over the full term is larger than the principal you started with. The difference is the interest your invested money earned along the way.
Reading the results
The monthly payout is the steady income the principal can support for the chosen number of years. The total payout is that amount multiplied across every month of the term.
The pie chart splits the total payout into your original principal and the interest earned on top of it. A higher rate or a longer term shifts more of the pie toward interest, since the balance has more time and more return to compound.
Practical tips
A few levers change the monthly figure the most:
- A longer payout period lowers the monthly amount, because the same principal is stretched over more withdrawals.
- A higher assumed rate raises the payout, but only if the investments actually deliver that return.
- If you want the balance to last indefinitely rather than empty out, withdraw only the earnings instead of using a fixed drawdown.
Caveats
This model assumes a constant return every month, which real investments rarely deliver — a run of poor early returns can drain a drawdown faster than the math suggests. It also ignores taxes and inflation, so the fixed payout buys less in later years.
Treat the output as an educational estimate, not financial advice or a guaranteed income. Consult a qualified financial professional before relying on a withdrawal plan.
Formula
r = annualRate/100/12; n = years×12; payout = PV·r / (1 − (1+r)⁻ⁿ)Frequently asked questions
- What happens to the balance at the end?
- The payout is sized so the balance reaches zero at the end of the term. A longer term means a smaller monthly payout.