How this calculator works
Enter the fund expected at the start of retirement in future dollars; the tool does not grow an existing fund through the waiting years. Before-retirement inflation translates the first nominal payment into today purchasing power. After-retirement cash flow growth changes later withdrawals, while the separate inflation assumption values the closing fund in purchasing power at retirement. Set the schedule start to the beginning of the retirement phase. The nominal return is converted to the selected payment interval before valuing cash flows. The first cash flow is the entered amount; later cash flows grow by the equivalent periodic growth rate. Choose beginning or end timing and yearly summaries or individual payment rows. Enter a whole number of payment periods. Time solving finds the first payment period reaching the goal, adjusting the last cash flow to finish there; this mode supports non-negative returns and cash flow growth up to a 100-year horizon. Rate solving searches nominal annual returns from -99% to 200%. Dates use a 365.25-day model year and are illustrative rather than bank settlement dates. Taxes, CPP, OAS, pensions and minimum-distribution rules are excluded.
Formula
Let j be the nominal annual return, m the compounding count and q payments per year. i = (1 + j/m)^(m/q) - 1, or exp(j/q) - 1 for continuous compounding. g = (1 + annual cash flow growth)^(1/q) - 1. For n payments, A = ((1+i)^n - (1+g)^n)/(i-g), with A = n(1+i)^(n-1) when i=g. Multiply A by (1+i) for beginning payments. Closing balance = opening balance x (1+i)^n + signed first payment x A. Today purchasing power of first withdrawal = first withdrawal / (1 + pre-retirement inflation)^(retirement age - current age).
Worked example
With $1,000 at retirement, zero return, no withdrawal growth and ten annual payments, each withdrawal is $100. If retirement is ten years away and inflation is 10% annually, that first payment has $38.554329 of today purchasing power. At a $210 starting fund, 10% return and two year-end payments, the level payment is $121.
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Frequently asked questions
Which balance should I enter?
Use the amount expected when retirement withdrawals begin. The existing retirement savings calculator can project that amount from current savings and contributions.
Does a calculated payment qualify as safe?
The fund follows a constant-return model. Variable returns, longevity and unexpected expenses can make an apparently affordable payment unsuitable.
Are future taxes included?
No. This page works with gross fund withdrawals. Account rules, benefits and marginal tax rates need a separate calculation.