Retirement Payout Calculator

Portfolio balance is the amount intended to support withdrawals. Payout years is the period over which the model distributes that balance. Annual return is the assumed portfolio growth, while inflation describes how prices may rise over time.

Add Social Security, pension, annuity, and other monthly income in their respective fields. Enter the desired monthly income as a spending target, not as an additional income source. The legacy goal is the amount you hope to leave at the end of the modeled payout period.

The current age provides a reference for interpreting the duration. For instance, age 65 and a 30-year payout period correspond to age 95 at the end of the modeled horizon. It does not predict lifespan or guarantee that savings last to that age.

For benefit estimates, use your personal Social Security record at the Social Security Administration. If you want to isolate guaranteed pension income, compare with a pension payout calculator or pension income calculator.

A level annual payment can be calculated as an amortizing withdrawal that leaves a specified balance at the end. With $650,000, 5% annual return, 30 years, and a $25,000 legacy goal:

Annual portfolio payout
= [starting balance − legacy goal ÷ (1 + return)^years]
  × return ÷ [1 − (1 + return)^−years]

= [$650,000 − $25,000 ÷ 1.05^30]
  × 0.05 ÷ [1 − 1.05^−30]

≈ $41,923 per year

Convert that estimate to a monthly payout:

Monthly portfolio payout = $41,923 ÷ 12
≈ $3,493.58

The default Social Security and pension payments total:

Guaranteed monthly income = $2,200 + $600
= $2,800

Adding the example portfolio payout gives:

Estimated gross monthly income = $3,493.58 + $2,800
≈ $6,293.58

If a 15% tax rate were applied uniformly for illustration:

Illustrative after-tax income = $6,293.58 × (1 − 0.15)
≈ $5,349.54 per month

This arithmetic does not establish the calculator’s exact output. It assumes level nominal annual withdrawals, a constant 5% return, equal monthly conversion, and an ending portfolio value of $25,000. Actual taxes vary by source and household circumstances.

The first formula discounts a desired ending balance to its value at the start of the payout period:

Present value of legacy goal
= legacy goal ÷ (1 + annual return)^payout years

The portfolio payment then distributes the remaining balance over the selected term:

Annual portfolio payout
= [portfolio balance − present value of legacy goal]
  × annual return
  ÷ [1 − (1 + annual return)^−payout years]

Monthly gross income combines portfolio payouts with the entered monthly income sources:

Gross monthly income
= monthly portfolio payout
  + Social Security
  + pension
  + annuity
  + other monthly income

A simplified tax adjustment is:

Estimated after-tax income
= gross taxable income × (1 − assumed tax rate)

Actual implementations may apply the tax rate to a different portion of income. Social Security, pension payments, annuity payments, and portfolio distributions do not necessarily have identical tax treatment. Check the result definitions and treat a single tax rate as a rough estimate.

A longer payout period generally reduces the level payment because the portfolio must support more years. A shorter period can raise the modeled payout but increases the risk that you outlive the plan. Testing life expectancy beyond the default horizon can show how sensitive the estimate is to longevity.

Inflation changes what a fixed nominal payment can buy. If a payout remains $5,500 per month while prices rise 2.5% annually, its purchasing power falls over time. A growing withdrawal may preserve purchasing power more closely, but it can require a larger starting balance and may leave less for a legacy.

A legacy goal also competes with current spending. Requiring a larger ending balance reduces the amount available for withdrawals under a fixed-return model. If leaving a specific amount is less important than stable lifetime income, test a lower legacy goal and compare the income difference. An annuity calculator can help compare a guaranteed-payment option with portfolio withdrawals.

The following table applies the same level-payment formula at 5% return to the default $650,000 portfolio. The amounts are illustrative; each row changes one assumption.

A longer period lowers the payout because the money must cover more years. A legacy goal of $25,000 lowers the payment slightly relative to spending the entire modeled balance. The actual size of these effects depends on the assumed return and the calculator’s payment method.

Compare the portfolio payout with desired income. If the gap is large, possible tradeoffs include lower spending, more guaranteed income, a later retirement date, or a smaller legacy target. A retirement number calculator can estimate the savings target behind a desired spending level, while a retirement withdrawal strategy calculator can help compare withdrawal approaches.

The entered tax rate is not a personalized tax calculation. Traditional workplace-plan and IRA withdrawals are generally taxable as ordinary income, while qualified Roth distributions may receive different treatment. Social Security may also be taxable depending on combined income. The IRS provides an overview of taxation of retirement income.

Many retirement-account owners must take required minimum distributions beginning at age 73 under current law, subject to account-specific exceptions. RMDs do not necessarily equal the amount you want to spend; they are minimum distribution requirements. Review the IRS information on required minimum distributions.

For a withdrawal plan that considers account order and taxes, read what is the best order to withdraw from retirement accounts and compare a tax-efficient retirement withdrawal calculator.

Compare monthly payouts with your retirement budget, test a longer payout horizon, and see what happens when the return is lower or inflation is higher. If the projected income does not meet your target, compare savings, retirement timing, and guaranteed-income options before relying on a larger portfolio withdrawal.

For an account-specific withdrawal estimate, use the IRA payout calculator or 401(k) withdrawal calculator. Then review how 401(k) withdrawals are taxed in retirement.