How much could my savings pay me each month?
Type what you have, or expect to have, and the return it keeps earning. The answer is the monthly amount under the 4% rule, and what the pot would pay if you used it up over 20 or 10 years.
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Your answer
Under the 4% rule, €400,000 would pay about €1,333 a month.
- €1,333 a monthUnder the 4% rulea rule of thumb from US market history, not a guarantee
- €2,615 a monthOver 20 yearsusing the pot up, at 5% a year
- €4,221 a monthOver 10 yearsusing the pot up, at 5% a year
The 4% rule takes 4% of the pot in the first year, divided by 12, then raises it with prices; US studies found it lasted 30 years in most past periods, with no guarantee for the future. The 20- and 10-year amounts use the pot up at 5% a year, before inflation, fees and tax. An estimate, not a promise.
The full retirement calculator shows how long a pot lasts at any spending, with inflation, tax on withdrawals and a split between index funds and bonds.
Illustration only, not investment advice. Assumes a steady return; real returns vary.
What the three amounts mean
The 4% rule comes from US studies of past markets (a 1994 study in the Journal of Financial Planning and the 1998 Trinity University study): taking 4% of a mixed portfolio in the first year, then the same real amount every year, lasted at least 30 years in most past periods. It is a planning rule of thumb, not a promise about any future period.
The 20- and 10-year figures are annuity payments: the equal monthly amount that spends the pot down to nothing by the end, while the rest keeps earning the return you set. They are higher than the 4% figure because they do not try to keep the pot alive.
Inflation, tax on gains and fees all lower what you can actually spend, and a bad run of years early in retirement hurts more than the same run later. Retiring much earlier than 30 years before the end calls for a lower rate than 4%.
Questions and answers
How much income does a pot of savings give?
Under the 4% rule of thumb, 1% of the pot every three months, which is a third of a percent a month: 360,000 pays about 1,200 a month, 500,000 about 1,667 and 1,000,000 about 3,333. That rate is meant to keep the pot going for about 30 years through good and bad markets. It is a rule of thumb from US market studies (a 1994 article in the Journal of Financial Planning and the 1998 Trinity University study), not a guarantee, and the money has to stay invested for it to apply.
How long will my money last if I spend it down?
Exactly as long as you set, and the monthly amount follows from that. 360,000 at a 5% return pays about 2,354 a month for 20 years or about 3,799 for 10 years, with nothing left afterwards. The 4% rule's 1,200 a month is lower because it aims to leave the pot intact. The page shows all three so you can see the trade-off between a higher income and a longer one.
Is the income taxed?
Often partly. In many countries only the gain inside each withdrawal is taxed, not the deposits you put in, and some holding periods or account types are exempt. The figures on this page are before tax. The retirement calculator has a tax switch that applies a rate to the gain part of each withdrawal.