Pension Distribution Calculator

A pension fund is only as good as the income it can pay. The classic question is simple: at a given withdrawal rate, how much do I get each month, and how long does the money last? The honest answer depends on one more input most simple tools ignore: whether the remaining balance keeps growing while you draw it down.

The Pension Distribution Calculator below starts with the straightforward math: annual and monthly payouts, total distributed, and the remaining balance. Switch on the growth mode and it builds a year-by-year schedule with your expected return, shows the fund balance each year, and tells you how many years the money lasts.

How pension distribution is calculated

Simple mode: annual payout = fund x withdrawal rate; monthly = annual / 12; total = annual x years; remaining = fund − total (floored at zero). This assumes the fund earns nothing while you draw it, so treat it as a conservative floor.

Growth mode: each year the balance grows by your expected return, then the annual withdrawal is paid. This shows the year-by-year schedule and, crucially, how many years the money actually lasts. A 4% return on a 5% withdrawal stretches a $500,000 fund well past the 20 years the simple mode exhausts.

Worked example

A $500,000 fund at a 5% withdrawal rate over 20 years:

• Annual distribution = $500,000 x 5% = $25,000
• Monthly = $25,000 / 12 = $2,083.33
• Simple mode: total $500,000 distributed, $0 remaining
• Growth mode at 4% annual return: same $25,000 per year, but $351,109.61 remains after 20 years

Run these numbers through the calculator above in both modes and you will get the same figures.

What competitors miss

Rival pension calculators either give you the simple division or the growth model, but never both side by side, and the simple ones never warn you that they assume zero growth. None of them shows a year-by-year schedule you can actually read, and none answers "how many years will this last" directly. This calculator keeps the simple math for quick estimates and adds the growth schedule, the depletion year, and a full balance table for real planning.

Frequently asked questions

What is the 4% rule?

The 4% rule of thumb says you can withdraw 4% of your retirement fund in the first year, then adjust for inflation, and the money should last about 30 years. It comes from historical market simulations, not a guarantee, but it is the most common benchmark for a safe withdrawal rate.

How long will my pension fund last?

It depends on the withdrawal rate and the growth of the remaining balance. Use the growth mode above and read the "Fund lasts" line: it simulates year by year until the balance reaches zero.

Should I include inflation?

For honest planning, yes: a $25,000 annual payout buys less each year as prices rise. A practical approach is to raise the withdrawal rate slightly in growth mode to proxy inflation, or treat the simple-mode result as spending power in today's money.

Is the remaining balance guaranteed?

No. Both modes assume a fixed return and fixed withdrawals. Real markets vary, which is why planners re-run this calculation every year with the actual balance.

What happens if my withdrawal rate is too high?

The schedule shows it plainly: the end balance hits zero in a specific year. If that year is before you need the money to run out, lower the withdrawal rate or plan additional income.