The tool will calculate the safe withdrawal rate for your retirement savings.
How to Use the Calculator
To use the calculator, enter the following information:
- Initial Investment: The amount of money you initially invest.
- Annual Withdrawal Rate: The percentage of the initial investment you plan to withdraw every year.
- Investment Duration: The number of years you plan to make annual withdrawals.
- Assumed Growth Rate: The annual percentage growth you expect from your investment.
After entering the above information, click the “Calculate” button to see the result.
How the Calculator Works
The calculator computes the amount of money left at the end of the investment duration based on the inputs. It factors in your annual withdrawals and the growth of your investment. Here’s the formula:
Remaining Investment = Initial Investment * ((1 + Growth Rate) ^ Investment Duration) – (Annual Withdrawal * Investment Duration)
Limitations
This calculator assumes that the annual growth rate is constant and does not account for fluctuations in the market. Additionally, taxes, fees, and other external factors are not considered.
Use Cases for This Calculator
Calculate Monthly Interest
Enter your initial investment amount, interest rate, and investment period in years to calculate the monthly interest gained. This will help you understand how your investment grows over time, allowing you to make informed financial decisions.
Determine Total Return on Investment
Input your initial investment and the total investment period in years to see the total amount you will receive after the specified period, including both the principal amount and the accrued interest. This will give you a clear picture of your return on investment.
Compare Different Interest Rates
Compare the monthly interests earned at varying interest rates to see how different rates impact your investment growth. You can input multiple interest rates to see how each rate affects your returns over time.
Estimate Future Investment Value
By entering your initial investment amount, interest rate, and the number of years you plan to invest, you can calculate the future value of your investment. This projection can help you set financial goals and track your investment progress.
Plan Savings Goal
Set a savings goal by entering the amount you want to save, the interest rate, and the time period. The calculator will show you how much you need to invest regularly to reach your savings goal within the specified timeframe.
Calculate Compound Interest
Input the principal amount, interest rate, compounding frequency, and investment period to calculate the compound interest earned. This will illustrate how compounding can significantly increase your investment returns over time.
Assess Impact of Additional Investments
Explore the effect of adding regular contributions to your investment by inputting the additional monthly investment amount. The calculator will show you the impact of these extra contributions on your overall returns.
Optimize Investment Period
Adjust the investment period to see how the duration affects your total return. You can experiment with different timeframes to find the optimal period for maximizing your investment gains based on your financial goals.
Analyze Interest Earnings Breakdown
View a detailed breakdown of the interest earned each month over the investment period. This breakdown provides insights into how your investment grows over time and helps you understand the impact of compounding on your earnings.
Plan Retirement Savings
Plan for retirement by entering your current savings, desired retirement savings goal, and the number of years until retirement. The calculator will help you determine how much you need to save each month to achieve your retirement target.