The fund needed for modeled retirement withdrawals
The corpus is the fund needed on the retirement date to cover the modeled beginning-year withdrawals and optional ending reserve. With the reserve disabled, the final balance approaches zero. The planned reserve is nominal money after the final year’s return; it does not provide an automatic emergency or longevity allowance.
To estimate contributions toward this retirement-date fund target, use the Savings Goal Calculator with the years remaining and assets already allocated to retirement.
The formula
Each full year’s spending is withdrawn at the beginning of that year. The remaining balance earns the annual return before the next withdrawal. Rates are decimals. Summing the discounted withdrawals also handles equal inflation and return rates without division by zero. Monthly entry is multiplied by twelve; annual entry uses the budget directly. The ending reserve is discounted over every retirement year because it is due after the final return. Its nominal amount is not increased by inflation.
A retirement with no growth or inflation
At retirement, monthly expenses of 1,000 equal annual spending of 12,000. Funding twenty years with zero inflation and zero return requires 240,000. Enabling a 10,000 ending reserve increases the required fund to 250,000 and leaves 10,000 after the final year.
How to use this calculator
- Choose monthly or annual expense entry and enter the budget at today’s prices. Switching entry converts the same budget.
- Set the whole years until retirement and in retirement, then enter expense inflation and retirement return assumptions.
- Optionally enable an ending reserve and enter its nominal future amount. Review the live fund target and annual withdrawal schedule.
A finite target is sensitive to its assumptions
Adding retirement years increases the amount that must be funded. Expenses that do not recur every year, such as major home repairs, may need a separate provision. If pension income covers part of your spending, enter the remaining expense gap only when its future purchasing power is modeled consistently.
Constant growth hides sequence risk: poor returns early in retirement can have a greater effect when you are withdrawing money. This deterministic schedule cannot estimate the probability of running out of funds. It is useful for checking the arithmetic of an explicit scenario, not selecting a safe withdrawal rate.
Assumptions & limitations
What this calculation assumes
- Expenses rise once each retirement year at a constant rate.
- Withdrawals occur at the beginning of each year.
- No ending reserve unless enabled; an enabled reserve is a fixed nominal amount after the final retirement year.
What to keep in mind
- No longevity probabilities, tax, fees, or market volatility are modeled.
- This target is not a personalized retirement recommendation.
Common questions
Does the result include my current investments?
No. It estimates the required future fund. Use a savings-goal calculation with your current balance to estimate contributions toward that target.
Why does the last balance approach zero?
With the reserve disabled, the fund covers exactly the entered withdrawals. Enable an ending reserve to retain a specified nominal amount after the final retirement year. It adds the discounted cost of that amount to the fund required at retirement.
Can I enter an annual expense budget?
Yes. Choose Annual expenses to enter the whole yearly budget directly. Switching between monthly and annual entry converts by twelve. Fractional monthly cents are retained when an annual amount is not divisible into exact cents.
Sources & further reading
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