There are four variables; nest egg, earnings rate, monthly withdrawal, and number of withdrawals. Input any three and one of the calculators will find the fourth.
There are five calculators to do this. The first one determines how big the starting balance must be in order to allow a monthly withdrawal of desired number of dollars.
The second calculator lets you discover how much you can withdraw every month given a starting balance and the number of years (months) you want it to last. (Must hard-input the starting amount from the Nest Egg Calculator.)
The two other calculators let you learn the interest rate you need or the number of possible withdrawals given the amount you want per month.
The fifth calculator, at the bottom of the page, calculates total withdrawals, which is often 50 percent more than the starting balance, because it’s been earning compound income during the entire period of withdrawals.
- Required Cash Nest Egg: The “cash-equivalent” nest egg needed to fund a target monthly amount, given average earning rate and specific number of months. (Financial Planners recommend that nest egg be not less than fives times your annual income.)
- Monthly “Annuity” Withdrawals: The amount that can be withdrawn every month, given the nest egg, earning rate during the entire period, and number of months that you target.
- Earning Rate: The average rate of earning you expect over the entire period, e.g. 20 years or 240 months. (6 percent is traditional rate over long term.)
Enter the rate as .4, and not 4.0, if it’s 4 percent for instance. (Earnings are compounded daily.) - Number of Monthly Withdrawals: The number of monthly withdrawals that are possible, given the target amount, size of cash nest egg, and earning rate.
Calculators will reset to zero or go blank after your close. Data cannot saved. Inconvenient when need to carry answers from one calculator to another but safer than information being stored somewhere in the system.
