Pension Drawdown & Retirement Pot Longevity
Calculate how long your retirement savings or pension pot will last under flexible drawdown, accounting for investment growth, inflation, and the 4% rule.
Retirement Capital Balance Trajectory
Estimated Pot Balance by Retirement Age Milestone
| Age Milestone | Years in Retirement | Projected Pot Balance | Purchasing Power Value |
|---|
⚠ Sequence of Returns Risk
The mathematical projection above assumes a constant, smooth investment return each year. In reality, suffering severe market downturns in the first 3 to 5 years of retirement (known as sequence of returns risk) significantly accelerates capital depletion. Consider keeping 1 to 2 years of living expenses in cash cash-buffers to avoid selling equities during market dips.
About this tool
How to use it
- Enter your starting retirement savings / pension pot balance and your current age.
- Input your target annual withdrawal amount (or click 'Apply 4% Rule' to set a standard 4% safe withdrawal baseline).
- Adjust expected annual investment portfolio growth and projected inflation rates.
- Inspect the pot depletion age, monthly living income, visual balance curve, and age milestone breakdown.
Why it matters
Transitioning from accumulation (saving during working years) to decumulation (withdrawing capital in retirement) introduces critical risks. A mathematical drawdown calculator simulates the interaction between investment yields, compounding inflation, and withdrawal rates to protect against outliving your capital.
When to use it
Use this calculator when considering early retirement, evaluating pension lump-sum choices, testing the sustainability of annual living budgets, or stress-testing portfolio longevity.
Good to know
Formula uses annual compounding decumulation: Balance(t+1) = (Balance(t) × (1 + r)) - Withdrawal(t), with withdrawal increasing by annual inflation. 4% safe withdrawal rule benchmark originated from William Bengen's Trinity Study.
Common questions
What is the 4% rule in retirement planning?
The 4% rule is an empirical guideline originating from the 1994 Bengen study, showing that withdrawing 4% of a balanced retirement portfolio in year one (and adjusting subsequent annual withdrawals for inflation) gave a 95%+ probability of lasting at least 30 years.
How does inflation affect my pension drawdown?
If inflation averages 2.5% per year, an annual withdrawal of £20,000 today will need to increase to roughly £32,800 in 20 years just to maintain the exact same purchasing power for groceries, energy, and healthcare.
What is sequence of returns risk?
Sequence of returns risk refers to the danger of experiencing market losses early in retirement. When you sell equities during a market crash to fund living expenses, fewer shares remain to participate in subsequent market recoveries, dramatically shortening your pot's lifespan.
Are my pension details sent to any financial institutions?
No. This tool operates 100% locally in your browser memory. No financial figures or personal details are uploaded or shared.