Understand the calculation
Rules and data effective scope: General financial mathematics · monthly scenario · optional sale tax
Last reviewed: 2026-10-30
Table of Contents
Four ways to solve the same plan
Calculate an initial payment for a chosen duration, the duration of a chosen payment, the required starting capital, or a balance after a fixed period. A desired residual is stated in nominal euros at the end of the period. Duration is rounded to whole months.
Inflation adjustment can step up annually after twelve level payments or compound monthly at the effective monthly factor. Purchasing-power values still discount each payment and balance monthly. Annual-step and monthly-growing payments therefore require different capital amounts.
Convert returns and fees consistently
The monthly return is (1 + annual return)^(1/12) − 1. The annual fee drag becomes a monthly factor of (1 − annual fee)^(1/12). Returns are credited first, then fees charged on the resulting capital. The combined annual factor is (1 + return) × (1 − fee). A 4% return with 0.5% fees produces 3.48% after fees and before tax.
Money withdrawn at the beginning of a month earns no return in that month. An end-of-month withdrawal follows the return and fee calculation on the full opening balance. Equal beginning-of-month payments therefore usually require more starting capital.
Depletion and scenario limits
A withdrawal is capped at available capital. The plan then stops instead of continuing with a negative balance. Sufficient constant returns can mean no finite depletion date. The annual schedule still shows at most 100 years. Depletion beyond that horizon is labelled explicitly.
Optional sale-tax modelling uses the remaining cost-basis ratio, fund partial exemption, available calendar-year savings allowance and optional church tax. Only gains are taxed; desired net cash is converted into required gross sales. The scenario holds 2026 law constant and excludes Vorabpauschale, distributions, mixed FIFO lots and loss pots. It is neither a guarantee nor a safe withdrawal rate.
Begin with the spending gap you want the capital to cover
A withdrawal plan is easiest to interpret when it covers a defined gap between regular spending and other income. Separate recurring expenses from occasional purchases and keep a reserve for costs that the smooth monthly model does not describe. The initial withdrawal is not automatically your total household budget. A pension, rent income or part-time earnings may cover part of that budget, while taxes and insurance can reduce those other income sources. Establish the amount that must actually come from this investment before comparing the model's payment with your spending needs.
Use starting capital that is available for the plan rather than the value of every asset you own. Money reserved for an immediate purchase or held as a separate emergency reserve should not simultaneously finance the modelled withdrawals. If you include an investment that cannot readily be sold, a calculated payment does not prove the money will be liquid when required. The calculator assumes capital can fund each scheduled withdrawal. Keeping a separate cash reserve and checking actual liquidity are practical tasks outside that mathematical assumption.
A constant return is an assumption, not a withdrawal guarantee
The annual return field becomes the same effective monthly growth factor throughout the illustration. Real investments do not grow along that smooth path. Losses early in a withdrawal period can have a different effect from losses occurring later, because money already withdrawn cannot participate in a recovery. Two investments with similar average returns can therefore support different realised withdrawal paths. The chart illustrates the selected constant scenario; it does not model a distribution of possible outcomes or assign a probability that the capital will last.
Run several coherent scenarios instead of relying on a single optimistic number. For example, lower the assumed return while keeping the same costs and spending, then consider a longer duration or a larger residual target. Change one assumption at a time to see which has the greatest effect. A result labelled no finite depletion means only that the chosen mathematical growth and payment pattern do not exhaust the fund under those constant assumptions. It is not equivalent to a guaranteed lifetime income or evidence that the chosen withdrawal is safe under market volatility.
Inflation changes both future payments and their meaning
With a fixed nominal withdrawal, the euro amount stays constant while purchasing power can fall. With inflation adjustment enabled, payments either step up after each twelve-month period or grow every month, according to the selected frequency. The first payment is therefore the start of a rising sequence rather than a promise that every payment will equal the initial figure. The chart's real balance converts future capital back to the purchasing power at the start of the plan. Compare nominal payments with nominal targets, and real balances with today's costs; mixing the two can make an apparent surplus disappear.
A residual target is entered in nominal euros at the end of the duration. If your goal is to retain the purchasing power of today's reserve, translate that goal into the corresponding future amount before using the target field. The calculator does not silently reinterpret the target as an inflation-linked inheritance or an emergency fund. Similarly, a higher nominal closing balance can still represent less purchasing power. Review the real-balance series as well as the headline closing value when evaluating a long retirement or career-break plan.
Read the annual schedule as a cash-flow reconciliation
For each year, the schedule shows opening capital, returns, fees, withdrawals and the closing balance. It is a record of the same monthly calculation used for the headline result, not a second approximation using an annual interest shortcut. A final partial year contains only the months actually simulated. If the fund is exhausted, the final withdrawal is limited to the remaining available capital. The table does not continue paying the full requested amount from a negative balance. Check the final year carefully when a plan ends between two annual markers.
Beginning-of-month and end-of-month withdrawals differ because the withdrawn money participates in growth for a different amount of time. The fee assumption also matters: fees are applied as the stated recurring percentage drag, not as a separate invoice for custody, transaction costs or advice. Include only a coherent return-and-fee pair, so costs are not counted twice if your return assumption is already after those fees. The optional tax scenario tracks the remaining acquisition basis and taxes only the realized gain share after partial exemption and available allowance. Its fixed-law, single-cohort limitations remain important: it cannot reconstruct a real mixed-lot depot or future tax legislation.
A worked example
EUR 120,000 with no return, fees or inflation funds EUR 1,000 at each month-end for ten years. Capital is exhausted after 120 months. To retain EUR 12,000 after ten years, the constant monthly payment is EUR 900.
| Step | Assumption / calculation | Result |
|---|---|---|
| Starting capital | Before tax | €120,000.00 |
| Duration | 10 × 12 | 120 months |
| Residual target | Nominal at the end | €12,000.00 |
| Monthly withdrawal | (€120,000.00 − €12,000.00) / 120 | €900.00 |
| Total withdrawals | 120 × €900.00 | €108,000.00 |
| Closing balance | 0% return, fees and inflation | €12,000.00 |
Common questions
What happens at a zero return?
Payments come directly from capital. The same monthly recurrence works without dividing by an interest rate.
What does no finite depletion mean?
Under the selected constant assumptions only, modelled growth can keep funding the chosen payment. This does not protect against market losses or unexpected spending.
Is this a pension calculation?
No. It is a general investment withdrawal plan. Statutory pension rights, insurance and lifetime guarantees are not calculated.
Sources and scope
The linked sources explain the rules, effective dates and scope used in this calculator.
- Bundesministerium der Justiz / Bundesamt für Justiz: EStG · §32d(1); §20(9) · 2026-10-30Source checked: 2026-10-30 · Effective scope: 2026 current-law scenario
- Bundesministerium der Justiz / Bundesamt für Justiz: InvStG · §20 · 2026-10-30Source checked: 2026-10-30 · Effective scope: 2026 current-law scenario