How long your pot lasts and the monthly income it can provide.
The pot lasts
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First-year annual draw
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Sustainable monthly
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Your breakdown
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The race between your return and your withdrawals
Retirement drawdown is a tug of war. Each year your pot earns a return that pushes it up, and each year you pull out an income that drags it down, with that income rising as prices climb. Whichever force is stronger decides how long the money lasts. This calculator runs that contest year by year: it grows the pot at your expected return, subtracts a withdrawal that increases with inflation, and counts the years until the balance hits zero. There is no MPF, no salaries tax and no other complication baked in, because the question here is purely about cash flow, not the tax wrapper.
That simplicity is deliberate, and it is also why the answer can feel surprising. A pot that looks enormous can run dry faster than you expect once inflation lifts the withdrawal every single year.
Why the first withdrawal does not stay the first withdrawal
The tool starts with your chosen monthly figure, annualises it, and then grows it by your inflation assumption each year so your spending power holds steady. A withdrawal of $25,000 a month is $25,000 only in year one. By year ten, at 2.5 percent inflation, the same lifestyle costs noticeably more in nominal dollars, and the pot has to fund that rising number. The calculator also reports a sustainable monthly figure, which is the income the real return, your nominal return less inflation, could support without ever depleting the pot.
A $6 million pot drawing $25,000 a month
Take a $6,000,000 pot earning 4 percent, with a $25,000 monthly withdrawal and 2.5 percent inflation. The first-year draw is $300,000. Because the 4 percent return cannot keep pace with a withdrawal of that size once it starts compounding upward, the pot empties after 25 years on the calculator's loop. The sustainable figure tells a different story.
The gap between $25,000 and roughly $7,317 is the heart of it. Drawing $25,000 spends the pot down to nothing in 25 years; drawing about $7,317 could in principle run forever, because it lives off the real return alone. Most retirees sit somewhere between the two and accept a finite, planned horizon.
What the tool leaves out, on purpose
This is a cash-flow model, not a tax model. In retirement most ordinary income here is lightly taxed or untaxed: Hong Kong does not tax investment dividends or capital gains, and an MPF lump sum taken at the normal retirement age is generally not subject to salaries tax. So the withdrawal you model is close to what you can actually spend, which is not true in countries that tax pension income heavily. The model also assumes a fixed return every year, when real markets deliver good years and bad. A run of poor early returns can shorten the pot's life well below the smooth estimate, a risk worth respecting when you set your withdrawal.
A practical tip: do not anchor on the longest possible drawdown. Set the withdrawal closer to the sustainable figure in the early years, when sequence-of-returns risk bites hardest, and you give the pot room to recover from a weak start. This tool is for anyone with a defined pot, whether from MPF, personal savings or both, who wants a feel for how long it stretches at a given lifestyle.
Is my MPF or savings withdrawal taxed when I retire in Hong Kong?
An MPF benefit taken on reaching the normal retirement age is generally not chargeable to salaries tax, and Hong Kong does not tax investment gains or dividends from your savings. That means the income this tool models is broadly what you can spend, unlike jurisdictions that tax pension drawdowns. Confirm your specific position with the IRD, since early or irregular withdrawals can be treated differently.
What withdrawal rate makes the pot last indefinitely?
Roughly the real return, which is your nominal return minus inflation. In the example a 4 percent return against 2.5 percent inflation leaves about a 1.46 percent real return, which on a $6,000,000 pot is around $7,317 a month. Spend at or below that and the pot, in this smoothed model, is never exhausted.