Monthly payments
Income period
Portfolio left at end
Monthly income at each assumed annual return
The estimator finds a single level monthly payment that uses up the whole portfolio by the end of the period, while the remaining balance keeps earning the assumed return each month.
PMT = (r × PV) ÷ [1 − (1 + r)^(−n)]
| PV | Portfolio value | |
|---|---|---|
| r | Monthly return | |
| n | Number of payments | |
| PMT | Monthly income | |
| Check |
Important assumptions
- A constant annual investment return.
- Monthly return = annual return ÷ 12.
- Monthly withdrawals stay level throughout.
- Returns are smooth, with no ups and downs.
- No investment volatility is modelled.
- No sequence-of-returns risk is modelled.
- No inflation adjustment.
- No fees or taxes.
- No extra top-ups or one-off withdrawals.
- The portfolio is run down to about S$0 at the end.
Version 1.1