Retirement Income Calculator
Turning a Balance Into a Paycheck
Once savings stop growing through contributions and start being drawn down, the question changes from "how much will I have" to "how much can I safely spend." This calculator answers the second question by combining a sustainable withdrawal from your portfolio with any Social Security or pension income you expect, producing a single monthly income figure you can budget against.
The Formula
Total Monthly Income = (Portfolio Income ÷ 12) + Monthly Social Security + Monthly Pension
The withdrawal rate defaults to 4%, a commonly cited starting point for a portfolio expected to last 30 years, though the appropriate rate depends on your time horizon, asset allocation, and risk tolerance.
Where This Calculation Matters
- Budgeting in retirement — converting a lump-sum balance into a monthly figure makes it comparable to actual living expenses.
- Testing withdrawal rate assumptions — a lower withdrawal rate produces less income today but reduces the risk of depleting the portfolio too early.
- Layering income sources — seeing portfolio income, Social Security, and pension income combined shows how much each source contributes to the total.
- Deciding when you can retire — comparing the total against required monthly expenses is a quick check on retirement readiness.
Withdrawal Rate Sensitivity on a $1,000,000 Portfolio
| Withdrawal rate | Annual income | Monthly income |
|---|---|---|
| 3.0% | $30,000.00 | $2,500.00 |
| 3.5% | $35,000.00 | $2,916.67 |
| 4.0% | $40,000.00 | $3,333.33 |
| 4.5% | $45,000.00 | $3,750.00 |
| 5.0% | $50,000.00 | $4,166.67 |
This is portfolio income only, before adding Social Security or pension income.
How to Use This Calculator
- Enter your retirement nest egg (total investable savings).
- Enter your intended withdrawal rate, or leave the 4% default.
- Enter your expected monthly Social Security benefit, if any.
- Enter your expected monthly pension benefit, if any.
- Select Calculate to see your total projected monthly and annual retirement income.
Related Calculations
Estimate the Social Security portion with the Social Security Calculator, or check the sustainability of your withdrawal rate against your savings horizon with the Retirement Planner.