Pension Drawdown Calculator: Estimate How Long Your Pension Pot May Last
Use this guide to understand the assumptions, inputs, results, and next steps behind the calculator.
Created by Luis Gonzalez · Last updated August 22, 2026
Pension drawdown means taking withdrawals from an invested retirement pot instead of converting all of it into a fixed lifetime annuity. The length of time the pot lasts depends on its starting balance, investment returns, withdrawal amount, withdrawal increases, inflation assumptions, and the order in which returns occur.
With the default inputs, a $500,000 pot grows for five years before retirement, from age 60 to 65. The calculator estimates a $550,466 balance at retirement, then projects $25,000 in first-year withdrawals that rise by 2% annually. Using a 5% nominal return and 3% inflation, it estimates that the pot lasts 23 years and is depleted at age 88. Total withdrawals are $694,447.
This is a projection, not a guarantee or a personalized safe-withdrawal recommendation. The model uses a constant annual return and does not simulate market volatility, taxes, fees, or spending changes. Compare the result with a retirement drawdown calculator and a pension withdrawal calculator.
Enter the pot, withdrawal, and retirement timeline
Enter the pension pot you expect to use for drawdown, the annual withdrawal, and the expected investment return and inflation rate. The calculator uses the annual withdrawal amount when it is greater than zero. The withdrawal-rate input is used only if the annual withdrawal is zero, in which case the first withdrawal is calculated as a percentage of the retirement balance.
Current age and retirement age determine how many years the pot is projected to grow before withdrawals start. Life expectancy provides a planning horizon for comparison; the calculation itself projects up to 50 years after retirement. The annual withdrawal increase controls how much the dollar withdrawal rises each year.
The calculator converts the nominal investment return into an inflation-adjusted, or real, return. It then applies that real return both before and during retirement. That means the result should be read as a simplified model in comparable purchasing-power terms, rather than a detailed forecast of nominal account values.
Default example, calculated step by step
The first step is to adjust the assumed 5% investment return for 3% inflation:
Real return = (1 + nominal return) / (1 + inflation rate) − 1
Real return = (1 + 0.05) / (1 + 0.03) − 1
Real return = 1.019417 − 1 = 0.019417, or about 1.94%
The calculator applies that real return for the five years from age 60 to age 65:
Balance at retirement = starting pot × (1 + real return) ^ years before retirement
$500,000 × (1.019417) ^ 5 = about $550,466
Because the entered annual withdrawal is $25,000, it uses that amount rather than calculating a withdrawal from the 5% withdrawal-rate field. The withdrawal rises by 2% each year: the second year is $25,000 × 1.02 = $25,500; the third is $25,000 × 1.02² = $26,010. Each year, the model adds its assumed real investment growth to the remaining balance and subtracts that year’s withdrawal.
Under these assumptions, the projected fund lasts 23 years, reaching depletion at age 88. The projected total withdrawn is $694,447. This total can exceed the starting $500,000 because the pot earns modeled investment growth along the way. The output does not mean the withdrawals are guaranteed or that the same result will occur in a real portfolio.
How to read the depletion estimate
“Years money lasts” is the number of years the model can fund withdrawals before the balance reaches zero. “Depletion age” adds that duration to the retirement age. In this example, 23 years after age 65 corresponds to depletion at 88. The calculator also provides an effective withdrawal rate based on projected amounts; it is not automatically equivalent to a rule-of-thumb withdrawal percentage.
The model assumes smooth annual returns. Real investments can rise and fall, and a large loss early in retirement can be more damaging than the same loss later because withdrawals continue while the portfolio is down. This is known as sequence-of-returns risk. A constant-return projection can therefore make a plan appear more stable than it may be.
It also does not include pension income, Social Security, taxes, investment fees, required minimum distributions, or one-time spending. A more complete income estimate can combine pensions and other sources using a pension income calculator or a retirement calculator with pension and Social Security. For background on required distributions, see required minimum distributions explained.
Compare withdrawal assumptions
The table changes one input at a time from the default pot and retirement age. “First-year withdrawal” is the amount the model starts with; the duration effect is directional because the calculator’s final estimate also depends on the full yearly projection.
| Starting pot | Annual withdrawal | Withdrawal increase | First-year withdrawal rate on $550,466 at retirement | Expected direction |
|---|---|---|---|---|
| $500,000 | $20,000 | 2% | 3.63% | Lower withdrawals generally extend the drawdown period |
| $500,000 | $25,000 | 2% | 4.54% | Default annual withdrawal; projected depletion at age 88 |
| $500,000 | $30,000 | 2% | 5.45% | Higher withdrawals generally shorten the drawdown period |
| $500,000 | $25,000 | 3% | 4.54% | Faster annual increases generally shorten the drawdown period |
The percentages in the table use the model’s projected retirement balance of $550,466. A withdrawal increase is a separate assumption from inflation. For example, a 2% annual increase is below the assumed 3% inflation rate, so the withdrawal’s purchasing power declines over time under a simple comparison.
Test a few plans instead of treating one forecast as a pass-or-fail result. For example, compare a lower withdrawal with a later retirement date, or test a more conservative return. A retirement withdrawal calculator and pension income calculator can help connect withdrawals to recurring income and spending.
Formulas used in the projection
Inflation-adjusted return = (1 + investment return) / (1 + inflation) − 1
Balance at retirement = starting pot × (1 + inflation-adjusted return) ^ years before retirement
First-year withdrawal = entered annual withdrawal, if greater than zero
Otherwise: first-year withdrawal = retirement balance × withdrawal rate
Withdrawal in year n = first-year withdrawal × (1 + annual withdrawal increase) ^ (n − 1)
Ending balance = beginning balance + investment growth − withdrawal
The projection stops treating withdrawals as payable once the available balance reaches zero. It is capped at 50 years after retirement, which is why a result at the cap should not be interpreted as proof that the money lasts indefinitely.
Rules and planning details that can change the outcome
The calculator does not apply a universal “safe” withdrawal rate. A commonly discussed percentage is a planning heuristic, not a legal threshold or promise of sustainability. Your result depends on asset allocation, fees, taxes, withdrawal timing, inflation, and whether expenses are flexible.
In the United States, required minimum distributions generally begin at age 73 under current law for many tax-deferred accounts, with the starting age scheduled to rise to 75 in 2033 for affected individuals. RMDs are tax rules for eligible accounts, not a recommended spending amount or a guarantee that a portfolio can support a chosen withdrawal. Review the IRS RMD information and see how to calculate your RMD step by step.
A pension pot may also be subject to plan or jurisdiction-specific drawdown rules. The product may be a defined-contribution account, a personal pension, or another arrangement, each with different tax and access rules. For plan-specific income, compare a pension calculator or military pension calculator. If you are comparing a lump sum with regular payments, use a pension lump sum calculator.
Frequently asked questions
Does “depletion at age 88” mean I will run out of money at 88?
No. It means the balance reaches zero at that age in this specific constant-return projection. Real results may differ because markets, withdrawals, fees, taxes, and inflation do not follow a fixed annual path.
Why is my withdrawal-rate input ignored?
The calculator uses the annual withdrawal amount whenever it is greater than zero. Set annual withdrawal to zero if you want the first withdrawal calculated from the withdrawal-rate input.
Should I choose a fixed withdrawal or increase it with inflation?
A fixed real spending target can help maintain purchasing power, but it may strain a portfolio after poor returns. A fixed dollar withdrawal can be easier to budget but loses purchasing power when prices rise. A flexible strategy can reduce withdrawals after losses, in exchange for less predictable spending.
Does the result include tax on withdrawals?
No. The model projects account balance and withdrawals without subtracting taxes or fees. Tax treatment depends on account type and circumstances. A pension tax by state calculator may help with one part of the tax question, but it is not a full tax return.
Is the 5% investment return guaranteed?
No. It is an input assumption applied as a steady return in the model. Investment returns vary, and an average return does not describe the order or size of annual gains and losses.
Should I use my full life expectancy as the planning horizon?
Use an assumption that gives you a reasonable margin, rather than treating an estimate as a prediction. A longer horizon tests whether the plan can support more years of withdrawals. Compare a range of retirement ages and spending amounts with a retirement number calculator.
Next steps after checking the estimate
Run a lower-withdrawal and lower-return scenario, then compare the projected balance with your expected essential expenses and other dependable income. Confirm account-specific access, tax, and RMD rules before choosing a withdrawal plan. If the projection shows a gap, test a later retirement age, more flexible withdrawals, or additional income rather than relying on a single return assumption.