Pension Drawdown Calculator

Find out how long your Pension might last

Why use a Pension Drawdown Calculator

You’re planning for a comfortable retirement, and a pension drawdown calculator can be an essential tool. It estimates how long your funds will last, giving you a clear picture of your financial longevity.

This calculator helps you make informed decisions to ensure your retirement savings are managed wisely.

How Long Your Funds Lasts

We are all worried about running out of money in retirement. This calculator provides an illustration, based on the past performance of funds, to answer that question.

Adjust the Investment Mix

How long our funds may last depends on how they’re invested. Adjust whether you are a more cautious or adventurous investor and watch the results change.

Plan Your Next Steps

Depending on the results, you can make a difference by acting now, whether this is to adjust the amount you’re saving or to adjust your investment portfolio.

Pension Drawdown Calculator

How to use the Calculator

Your Retirement Plan

Start by considering your retirement age and how long you anticipate needing an annual income. This helps prevent the worry of whether your money will last or if you’ll run out of money prematurely.

Use a reasonable timeframe. The median age of death is 81.8 years for males and 85.5 years for females, according to the ONS.

Input a figure which reflects your total combined pensions. If you have any other invested money in ISA’s or General Investment Accounts you could also add these to the total.

The Pension Drawdown Calculator makes assumptions of the potentially expected growth of invested funds, depending on your risk profile.

The usual pattern of spending in retirement sees an initial increase as people go on more holidays and spend on their homes. However, this drops when people become less able/willing to go on holidays in mid-retirement. Consideration should be given to later retirement care, though, as costs for nursing homes and retirement villages are high.

Input a figure which will comfortably cover your bills and excess spending throughout retirement.

This box will auto-complete if you input a Withdrawal Amount. Alternatively you could enter a percentage here.

This option gives you an indication of the percentage chance of your goal being met.

So, if you want to maintain the initial value of your pension, based on your stated withdrawal amount and portfolio, it will tell you, out of 100, how many times this might be possible.

Equally, if you choose the Stay Above Zero option, it will tell you the forecasted percentage that this might happen. In other words, if the percentage is less that 100, there is a chance, based on your inputs, you might run out of money.

If you choose the Custom Goal option, you can select a fund amount you don’t wish to go below.

Your Portfolio

The calculator uses historical performance to illustrate future potential growth; therefore, what you enter in the Your Portfolio section will change the outcomes.

This selection is about risk. How much risk do you wish to take with your portfolio in retirement? The more risk you take, the larger the exposure to the riskiest category, Stocks. The less risk you take, the less exposure to stocks and more exposure to bonds and cash.

Play with the buttons to see how much exposure each area has to stocks.

If you wish to enter your own mix, use the Custom button and enter the amounts.


Risk Stocks Bonds Cash
Aggressive 90 10 0
Growth 70 30 0
Conservative 50 50 0
Income 20 70 5
All Stocks 100 0 0
All Bonds 0 100 0
All Cash 0 0 100

State Pension

This is where you enter your forecasted State Pension. If you don’t yet know this, you can find out here.

Enter the pension amount and start date based on your state retirement age.

The State Pension will rise with inflation once in payment. The calculator reduces the Withdrawal Income figure (entered earlier) from the point the State Pension starts, meaning a more sustainable pension.

Analysing the Results

The Pension Drawdown Calculator analysis provides a forecast of results based on your inputs. The calculator shows you how long your pension might last based on your withdrawal rate and portfolio risk. Remember, the calculator only gives an estimate, and you may get back less than you invest.

By adjusting the settings, you can see how different investment mixes impact the growth they produce. You can also toggle the income required to understand what is a sensible withdrawal rate.

Always consider the risk that your funds could deplete faster than anticipated.

How the Simulation Works

Our pension drawdown calculator doesn’t use algorithms or random numbers. Instead, it’s based on real historical data, simulating your retirement plan based on actual market movements.

It uses what’s gone on in the past to simulate outcomes based on if you’d retired in that year. By running many simulation for each time period we can amalgamate the data to provide an average.

Imagine you’re planning to retire for 30 years. The calculator will run a simulation for each year in that period, starting in 1928 and going up to the present day. For example, for the first 30 years, it will simulate your retirement from 1928 to 1958, then from 1929 to 1959, and so on. If your retirement period extends beyond the present day, the calculator will loop back to 1928 and count up again.

What Happens in Each Simulation Year

In each simulation year, the calculator performs specific actions to reflect your retirement scenario:

  1. Calculates Portfolio Growth: It determines how much your pension portfolio has grown or declined based on the historical market data for that year.

  2. Adjusts Withdrawals: It adjusts the annual withdrawal amount you plan to take based on the Consumer Price Index (CPI), which measures inflation. This ensures your withdrawals are able to cover the rising cost of living.

  3. Updates Portfolio Balance: It updates your pension portfolio balance by adding the portfolio growth and subtracting the adjusted withdrawal amount.

  4. Considers State Pension Payout: If you have a State Pension, the calculator increases the pension payout amount based on the CPI for that year.

  5. Adds Pension to Balance: It adds the adjusted pension payout amount to your overall portfolio balance.

  6. Rebalances Portfolio: At regular intervals, the calculator rebalances your portfolio to maintain your desired asset allocation, ensuring your investment mix aligns with your risk tolerance and financial goals.

Understanding the Simulation Results

The results of each simulation provide insights into potential outcomes for your retirement plan. By analysing the multiple simulations, you can gain a clearer picture of how different market conditions could impact your retirement income. This information can help you make informed decisions about your retirement strategies and risk tolerance.

The information in this calculator is for illustration periods only. It is not a guarantee of what is going to happen and is not financial advice.