WealthRetirement Calculator — savings + drawdown
Retirement calculator
For illustration only. Hypothetical return, not guaranteed — markets go up and down. This calculator does not constitute financial advice.
Show yearly table (end-of-year balance)
How the calculator works
Phase 1 — Accumulation
From your current age to your retirement age, the calculator applies the future-value formula with monthly contributions:
FV = PV · (1+i)^N + PMT · ((1+i)^N − 1) / i
where i = annual return / 12 (monthly rate) and N = number of months until retirement. The result is your nest egg — the capital available the day you retire. If the rate is 0, the formula simplifies to FV = PV + PMT × N.
Phase 2 — Drawdown
Starting from the nest egg, the simulation steps forward month by month: the balance first earns the monthly return, then the monthly expense (annual spending / 12) is subtracted. If inflation is enabled, the monthly expense grows each year by the chosen rate. The simulation stops when the balance reaches zero (depletion) or when the end age is reached.
Sustainable annual withdrawal
This is the maximum amount you could withdraw each year without ever depleting the capital before the end age, based on the annuity formula:
Sustainable PMT = Nest egg × i / (1 − (1+i)^−N)
where N is the number of months between retirement age and end age. If the rate is 0, it is simply the nest egg divided by N months.
Worked example
Age 35, $50,000 saved, $500/month contributions, 6% annual return, retiring at 65. The accumulation phase is 360 months: the nest egg reaches roughly $803,000. If you spend $40,000/year ($3,333/month) with no inflation, the 6% return keeps the balance positive well past age 95. But if you spend $60,000/year, the capital runs out around age 92. The chart makes this visible: the green rise of accumulation, then the red descent of drawdown.
TFSA, RRSP or non-registered: does it change the math?
The mathematical formula is identical across all three. The difference is tax: in a TFSA, growth and withdrawals are tax-free; in an RRSP, contributions are deductible but withdrawals are taxed as income; in a non-registered account, investment gains are taxable each year. This calculator does not model taxation — it shows the gross balance before tax, for illustrative purposes only.
Frequently asked questions
How does the accumulation phase work in this calculator?
The accumulation phase runs from your current age to your retirement age using the future-value formula with monthly contributions: FV = PV*(1+i)^N + PMT*((1+i)^N - 1)/i, where i is the monthly rate and N is the number of months. If the rate is 0, the formula becomes FV = PV + PMT*N.
What is the drawdown phase and how is it calculated?
The drawdown phase is when you withdraw from your nest egg. The calculator simulates month by month: each month the balance earns the monthly return, then the monthly expense is subtracted. With inflation enabled, monthly expenses grow each year. The simulation stops when the balance hits zero or you reach the end age.
What is the sustainable annual withdrawal?
It is the maximum annual withdrawal that would not deplete your capital before the end age. It uses the annuity formula: PMT = PV * i / (1 - (1+i)^-N). This is an illustrative estimate — actual returns vary. This calculator does not constitute financial advice.
Is inflation factored into the calculation?
Yes, if you enable the inflation toggle your annual spending is indexed each year at the chosen rate, gradually increasing monthly withdrawals. The Bank of Canada's target is 2%. A rate of 2 to 3% is a prudent assumption for long-term projections.
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