Savings Withdrawal Calculator

Q: Do I pay taxes on money I withdraw from savings?

It depends on the account type. Regular savings account: you owe tax on the interest you earn, not on your own money coming back out. Traditional IRA or 401(k): withdrawals count as income and are taxed. Taking money out before age 59½ usually adds a 10% penalty. Roth IRA: qualified withdrawals are tax free. Plan around your take-home amount, not the gross number.

Updated Sep 7, 2026 By Jehan Wadia

Introduction

The Savings Withdrawal Calculator shows you what happens when you take money out of your savings over time. Put in your balance, your interest rate, and how much you want to withdraw, and you get the balance left after every period.

You can solve for three things:

How long your savings will last: see the date your money runs out.
How much you can withdraw: find the biggest amount you can take each period without running short.
What interest rate you need: learn the return your savings must earn to reach your goal.

You choose how often you withdraw money, from weekly to once a year. You also choose how often your bank adds interest. These do not have to match. Many banks add interest daily even if you only pull money out each month.

Every result comes with a step-by-step solution, a chart of your balance over time, and a full schedule. The schedule lists each withdrawal, the interest you earn, and your balance after each period. This helps you plan for retirement income, a college fund, or any savings you plan to spend down.

How to use our Savings Withdrawal Calculator

Enter your savings balance, your interest rate, and how much or how long you want to withdraw. The calculator shows how long your money lasts, how much you can take out, or the return rate you need, plus a full withdrawal schedule and chart.

Choose What to Calculate: Pick one of the three options. Choose how long your savings will last, how much you can withdraw each period, or what interest rate you need. The form hides the field you are solving for.

Starting Savings Balance: Type the money you have saved today. You can use commas, and the top limit is $10,000,000.

Annual Interest Rate: Type the yearly return you expect on your savings, from 0% to 20%. This field is hidden when you solve for the rate.

Withdrawal Amount: Type the cash you plan to take out each time. This field is hidden when you solve for the withdrawal amount.

Desired Duration (Years): Type how many years the money must last. You can use half years, like 12.5. This field is hidden when you solve for duration.

Withdrawal Frequency: Pick how often you take money out: weekly, bi-weekly, monthly, quarterly, or yearly.

Compounding Frequency: Pick how often your bank adds interest to your balance. This can be different from how often you withdraw.

Withdrawal Timing: Choose "End of Period" if interest is added before you take money out. Choose "Beginning of Period" if you take money out first, then the rest earns interest.

Withdrawal Start Date: Pick the date of your first withdrawal. This sets the date on every row of the schedule.

Click Calculate to see your results, the step-by-step math, the balance chart, and the payout table. Click Reset to start over.

Savings Withdrawal: What It Means

A savings withdrawal plan is a simple idea: you have money saved, that money earns interest, and you take out a set amount every week, month, quarter, or year. Each time you take money out, the balance drops. Each time interest is added, the balance grows a little. Whether your savings last a long time or run out fast depends on which of those two forces is bigger.

The Three Big Questions

How long will my savings last? You know your balance, your interest rate, and how much you want to take out. You want to know when the money runs out.
How much can I withdraw? You know how many years the money must last. You want the largest safe amount to take out each period.
What interest rate do I need? You know your balance, your withdrawal, and your time frame. You want the return your money must earn to make the plan work.

Interest and Compounding

Interest is the money the bank or investment pays you for keeping your savings there. Compounding means that interest gets added to your balance, and then it earns interest too. A bank may compound daily, monthly, or yearly. The more often interest compounds, the slightly more you earn.

Your withdrawal schedule does not have to match the compounding schedule. A bank can compound interest daily while you pull out cash once a month. That is why both settings matter.

Beginning vs. End of Period

If you withdraw at the end of the period, interest is added first and then you take your money. If you withdraw at the beginning, you take your money first and only what is left earns interest. Taking money out at the beginning costs you a bit of growth, so your savings run out a little sooner.

When Savings Never Run Out

If the interest you earn each period is more than the amount you take out, your balance keeps growing. This is sometimes called living off the interest. For example, $250,000 earning 4.5% a year makes about $937 in interest each month. If you only withdraw $800 a month, the balance never drops.

Things That Change Your Results

Bigger withdrawals drain savings much faster than most people expect.
Higher interest rates stretch your money further, but higher returns usually mean more risk.
Inflation means a fixed withdrawal buys less each year. Real spending power falls even if the dollar amount stays the same.
Taxes may be owed on interest or on money pulled from retirement accounts, so your take-home amount can be lower.
Fees on an account or fund cut into your real rate of return.

Common Uses

People use withdrawal math for retirement income planning, paying for college from a savings fund, spending down an inheritance, or planning a break from work. It is also useful for checking a rule of thumb, like the 4% rule, against your own numbers instead of a general guess.

Formulas used

Periodic rate per withdrawal period (from nominal annual rate)

i = \left(1 + \frac{r}{c}\right)^{c/w} - 1

Number of periods until savings are depleted

n = \frac{\ln\!\left(\dfrac{PMT_{\text{eff}}}{PMT_{\text{eff}} - PV \cdot i}\right)}{\ln(1+i)}, \qquad PMT_{\text{eff}} = \begin{cases} PMT(1+i) & \text{beginning of period} \\ PMT & \text{end of period} \end{cases}, \qquad n = \frac{PV}{PMT} \;\; (i = 0)

Sustainable withdrawal amount per period

PMT = \frac{PV \cdot i}{1 - (1+i)^{-n}} \quad \text{(end of period)}, \qquad PMT = \frac{PV \cdot i}{\left[1 - (1+i)^{-n}\right](1+i)} \quad \text{(beginning of period)}, \qquad PMT = \frac{PV}{n} \;\; (i = 0)

Required periodic rate (solved numerically by bisection)

PV = PMT \cdot \frac{1 - (1+i)^{-n}}{i} \cdot (1+i)^{\delta}, \qquad \delta = 1 \text{ (beginning)},\; 0 \text{ (end)}

Annual rate recovered from the periodic rate

r = c\left[(1+i)^{w/c} - 1\right]

Projected balance after n periods

B_n = PV(1+i)^n - PMT_{\text{eff}} \cdot \frac{(1+i)^n - 1}{i}

Period-by-period schedule recursion

B_{k} = \begin{cases} \left(B_{k-1} + B_{k-1} \cdot i\right) - W_k & \text{end of period} \\ \left(B_{k-1} - W_k\right)(1+i) & \text{beginning of period} \end{cases}, \qquad n_{\text{total}} = \text{years} \times w

Frequently asked questions

How long will $500,000 last with a $3,000 monthly withdrawal?

It depends on your interest rate. At 0% interest, $500,000 divided by $3,000 lasts about 167 months, or roughly 13 years and 11 months.

With interest, it lasts longer:

3% a year: about 16 years, 8 months
4.5% a year: about 19 years, 1 month
6% a year: about 23 years, 2 months

Every extra point of return buys you a few more years.

What is the 4% rule for withdrawals?

The 4% rule says you take out 4% of your savings in year one, then raise that dollar amount each year for inflation. The idea is that the money should last about 30 years.

On $1,000,000, that is $40,000 the first year, or about $3,333 a month. The rule came from studies of past stock and bond returns. It is a guide, not a promise. Poor market years early in retirement can break it.

How much interest does $100,000 earn per month?

Divide the yearly rate by 12 to get a rough monthly number.

2%: about $167 a month
4%: about $333 a month
5%: about $417 a month

If you withdraw less than that each month, your balance keeps growing. If you withdraw more, the balance shrinks.

How much do I need saved to withdraw $2,000 a month forever?

Divide your yearly need by the interest rate. $2,000 a month is $24,000 a year.

3% return: $24,000 ÷ 0.03 = $800,000
4% return: $24,000 ÷ 0.04 = $600,000
5% return: $24,000 ÷ 0.05 = $480,000

This only works if the rate holds up. It also ignores inflation, so $2,000 will buy less each year.

What is the difference between an ordinary annuity and an annuity due?

Both describe a set payment made over and over. The difference is timing.

Ordinary annuity: the payment happens at the end of each period. Interest is credited first.
Annuity due: the payment happens at the beginning of each period. You take your money first, so less is left to earn interest.

An annuity due drains savings a bit faster. Rent and insurance are usually annuities due. Most bank interest and loan payments follow the ordinary pattern.

Does compounding frequency matter if I withdraw monthly?

Yes, but only a little. More frequent compounding earns slightly more.

On $250,000 at 4.5%, daily compounding earns about $10 more per year than yearly compounding. Over 20 years that adds up, but it will not change your plan much.

The size of your withdrawal matters far more than how often the bank posts interest.

What happens to my savings if I withdraw more than the interest I earn?

Your balance starts to fall, and it falls faster every year. That is because a smaller balance earns less interest, so more of each withdrawal comes out of your principal.

This speeding-up effect surprises people. The first few years look fine, then the balance drops off a cliff near the end.

How does inflation affect my withdrawal plan?

Inflation cuts what your money buys. At 3% inflation, $2,000 a month buys about $1,490 worth of goods in 10 years, and about $1,100 worth in 20 years.

Two common fixes:

Raise your withdrawal a little each year to keep up with prices.
Use your real return instead of the stated one. Subtract inflation from your interest rate. A 5% return minus 3% inflation is a 2% real return.

Do I pay taxes on money I withdraw from savings?

It depends on the account type.

Regular savings account: you owe tax on the interest you earn, not on your own money coming back out.
Traditional IRA or 401(k): withdrawals count as income and are taxed. Taking money out before age 59½ usually adds a 10% penalty.
Roth IRA: qualified withdrawals are tax free.

Plan around your take-home amount, not the gross number.

What is a safe withdrawal rate?

The usual guideline is 3% to 4% of your starting balance per year for a 30-year retirement. Some use 5% for shorter plans and 3% for longer ones or for cautious savers.

A lower rate is safer but means less spending money. A rate above 5% raises the chance you run out early, especially if markets drop soon after you start.

Is it better to withdraw monthly or once a year?

Taking money out less often leaves more in the account to earn interest, so a yearly withdrawal grows slightly more than 12 monthly ones of the same total.

The gap is small, usually a fraction of a percent. Most people pick monthly because bills come monthly. Cash flow matters more than the tiny interest gain.

How do I calculate how long my savings will last?

With no interest, just divide: balance ÷ withdrawal = number of periods.

With interest, use the annuity formula:

n = ln(PMT ÷ (PMT − PV × i)) ÷ ln(1 + i)

Here PV is your balance, PMT is your withdrawal, i is the interest rate per period, and n is the number of periods. Divide n by the number of withdrawals per year to get years.

If PMT is smaller than PV × i, the math breaks because the money never runs out.

What is sequence of returns risk?

It is the danger of getting bad investment returns in the first few years you spend down savings. Selling during a drop locks in the loss, and there is less money left to recover when markets rise again.

Two people can average the same return over 20 years and end up in very different places, purely because of the order the good and bad years arrived.

Holding one to three years of cash helps you avoid selling in a down year.

How much can I withdraw each month from $1 million?

Over 30 years, here is roughly what $1,000,000 supports each month:

0% return: about $2,778
3% return: about $4,216
5% return: about $5,368
7% return: about $6,653

These figures spend the balance down to zero. They are before taxes and do not adjust for inflation.

What interest rate do I need to make my savings last?

First check the shortfall. Multiply your withdrawal by the number of periods, then subtract your starting balance. If the answer is zero or less, you need no interest at all.

If there is a shortfall, interest must cover it. There is no simple formula to isolate the rate, so it is found by trial and error, testing rates until the ending balance hits zero.

If the required rate lands above about 8%, the plan is risky. Cutting the withdrawal is usually safer than chasing a high return.

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