Calculator guide
How much retirement income can principal support, and how long can it last?
Compare income supported by principal, the yield needed for a monthly income target, and planned drawdown spending, including how long the money can last.
Preserve principal
Calculate annual, monthly, and daily spending supported by investment income alone.
Target income
Enter principal and a monthly income target to work backward to the annual yield required to preserve principal.
How long will it last?
Subtract a fixed spending amount first, apply return to the balance, and calculate how long principal lasts.
How much can I spend?
Set a time horizon and work backward to the daily or monthly amount that uses the principal over that period.
How do you calculate the yield needed for a monthly income target?
Multiply the monthly income target by 12, then divide the annual target by principal. A $500,000 principal supporting $2,500 per month needs $30,000 per year, equal to a 6% annual yield before taxes and fees.
That is a simplified required yield, not a forecast. Taxes, fees, inflation, income cuts, and changes in principal value can all reduce the spending actually supported.
How is principal-preserving cash flow calculated?
The calculator multiplies principal by annual yield to estimate annual interest or dividend income. It then divides that amount by 12 months or 365 days.
For example, 10,000,000 at a 4% annual yield creates 400,000 in annual income before taxes and fees. That is about 33,333 per month or about 1,095.89 per day.
How does the drawdown calculation work?
In drawdown mode, the selected daily or monthly spending amount is subtracted first. The matching period return is then applied to the remaining principal. Principal falls when spending exceeds the return and can hold or grow when it does not.
How long will it last calculates the duration for a fixed spending amount. How much can I spend works backward from a fixed duration to a daily or monthly allowance.
What should you be careful about?
Every mode assumes a constant return for each period. Real investments can include dividend cuts, rate changes, price declines, FX, taxes, fees, and inflation.
Use the result to compare the scale of cash flow created by principal, spending, time, and return—not as a promise that a portfolio can safely fund spending.