Pension Drawdown Calculator: Monthly Income From a Pot
Work out the monthly income a pension pot can provide when drawn down over a chosen number of years — the flexible drawdown approach in place of an annuity.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Monthly income | Total drawn | Growth while drawing |
|---|---|---|---|
| $400k · 4% · 20yr | $2,423.92 | $581,741.12 | $181,741.12 |
| $250k · 3.5% · 25yr | $1,251.56 | $375,467.68 | $125,467.68 |
| $750k · 5% · 30yr | $4,026.16 | $1,449,418.38 | $699,418.38 |
| $150k · 4% · 15yr | $1,109.53 | $199,715.74 | $49,715.74 |
How This Calculator Works
Enter the pension pot, the return you expect the remaining balance to earn, and how many years the money must last. The calculator finds the fixed monthly drawdown that empties the pot at exactly the end of the period.
The Formula
Fixed-Period Drawdown
PV = savings pot, r = monthly rate (annual ÷ 12), n = number of monthly payments
Worked Example
A $400,000 pension pot earning 4% drawn down over 20 years supports about $2,424 a month. Over the period you withdraw roughly $581,700, with growth on the shrinking balance supplying the difference.
Key Insight
Drawdown keeps the pot invested while it pays out, which can produce more income than buying an annuity outright — but the trade-off is risk. A market drop early in retirement, when the pot is largest, lasts the longest.
Frequently Asked Questions
What is pension drawdown?
Drawdown means keeping a pension pot invested and withdrawing income from it as needed, rather than buying an annuity that pays a fixed amount for life.
Drawdown or annuity — which is better?
An annuity gives a guaranteed lifetime income; drawdown keeps flexibility and potential for growth but carries investment risk. Some people blend the two.
What return should I assume?
A retirement portfolio is usually conservative. A rate between cash and a balanced portfolio is common; a lower rate produces a more cautious estimate.
What is sequence-of-returns risk?
A bad market early in retirement hurts more than the same loss later, because withdrawals lock in the loss on a still-large pot. It is the main risk in drawdown.
Are pension withdrawals taxed?
Often partly. Rules vary by country and pension type; the figure here is pre-tax. The actual spendable income depends on local tax treatment.
Related Calculators
Data Sources & Benchmarks
This calculator draws on 2 independent, dated sources. The starting values for expected annual return are taken from the benchmarks below and refresh whenever the snapshots are updated.
Methodology & Review
The monthly income is the fixed amount that draws the pension pot down to zero over the period, with the remaining balance earning a steady return. Tax on withdrawals is not applied.
Written by Ugo Candido · Last updated May 17, 2026.