Annual Income
$56,538.89
Retirement Income Calculator
Determine sustainable monthly income your retirement savings can generate.
Sustainable Monthly Income
$4,711.57
Real Rate of Return
2.94%
Years Covered
25
How to use the Retirement Income Calculator
The Retirement Income Calculator is free and runs entirely in your browser — no sign-up, and nothing you enter leaves your device. It opens pre-filled with a realistic example, so you can see how it works before replacing any figure with your own; the results update as you type. Press Calculate to refresh the result panel, or Reset to return to the example.
The inputs it asks for:
- Retirement Savings — a dollar amount.
- Years in Retirement — a number.
- Expected Annual Return — a percentage (enter 6 for 6%).
- Inflation Adjustment — a percentage (enter 6 for 6%).
The formula
It solves for the level monthly income your savings can pay over your retirement years, using a real (inflation-adjusted) return so the figure holds its purchasing power. That income is the annuity payment that amortizes the nest egg to zero:
Real rate = (1 + return) ÷ (1 + inflation) − 1
Monthly income = the payment that amortizes the nest egg over the months at the real rate- Real rate
- the return after stripping out inflation
- months
- years in retirement × 12
Using the real rate means the monthly income is stated in today's dollars and stays constant in purchasing power — in nominal terms you'd actually withdraw a little more each year. It draws the balance to zero over the horizon, so build in a margin against a longer life.
Worked example
Using the example values — Retirement Savings $1,000,000.00, Years in Retirement 25, Expected Annual Return 5%, Inflation Adjustment 2% — the Retirement Income Calculator returns a Sustainable Monthly Income of $4,711.57. It also reports Annual Income ($56,538.89), Real Rate of Return (2.94%), Years Covered (25).
Prefer your own numbers? Change any field above and this recomputes instantly.
Key terms
- Real rate of return
- The growth rate after inflation is removed — what actually grows your purchasing power.
- Sustainable income
- The withdrawal that empties the balance over the chosen horizon.
- Nominal vs real
- Nominal is the raw dollar figure; real holds constant buying power.
Frequently asked questions
Why use a real return instead of the nominal one?
So the income keeps its purchasing power. A real-rate payment stays constant in today's dollars; in actual dollars you'd withdraw a bit more each year to keep pace with prices.
Does the money last forever?
No — it's sized to run out exactly at the end of your horizon. For income that could last indefinitely, withdraw less than the balance's real return.
What return and inflation should I use?
A diversified portfolio's long-run return and a long-run inflation estimate. The gap between them — the real rate — drives the result, so be conservative with both.