How long your pot lasts at a chosen drawdown.
Pot lasts
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Annual drawdown
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First-year withdrawal rate
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The tug-of-war between growth and withdrawals
A retirement pot in drawdown is caught between two forces every single month. Investment returns push the balance up, and the money you take out for living costs pulls it down. Whether your savings outlast you comes down to which force wins. This calculator runs that tug-of-war month by month: it grows the balance at your assumed return, subtracts your drawdown, and repeats until the pot hits zero, then tells you how many years you bought.
That month-by-month approach matters because the order of events compounds. Growth applies to whatever is left after the previous withdrawal, so a pot that is shrinking earns less each year in shilling terms even at a steady percentage return. The decline starts gently and then accelerates, which is why a balance can look healthy for a decade and still run dry sooner than people expect.
The withdrawal rate is the number to watch
The single most telling output is the first-year withdrawal rate: your annual drawdown as a share of the starting pot. It is the early-warning gauge for whether a plan is sustainable. A rate in the region of four to five percent is the conventional rule of thumb for a pot that should last several decades. Push much above that and you are spending capital faster than markets can reasonably replace it.
Drawing KES 80,000 from an eight million pot
Take the default scenario: a pot of KES 8 million, a drawdown of KES 80,000 a month, and growth of seven percent a year. That is KES 960,000 withdrawn annually against a starting balance of KES 8 million, a first-year withdrawal rate of twelve percent. At that pace the pot lasts twelve years and seven months before it is exhausted. The table tracks the balance at the end of selected years.
| End of year | Balance remaining |
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The chart traces the balance falling away over those twelve years. Notice how the line steepens: the drop from year six to year eight is far larger than the drop in the first two years.
Two things this model leaves out on purpose
Be clear about the limits before you lean on the result. First, the calculator ignores tax. In Kenya, pension income and lump-sum withdrawals can be taxable under a separate set of withdrawal bands administered by the Kenya Revenue Authority, so the KES 80,000 you draw is not necessarily KES 80,000 in your hand. If you need a fixed amount to spend, you may have to draw more than the headline figure, which shortens the timeline. Second, it ignores inflation. KES 80,000 buys less in year ten than in year one, so a flat drawdown quietly loses purchasing power even while the pot survives. These are tool assumptions, not tax figures, but confirm the current pension-withdrawal tax position with the KRA before you plan around a net income.
The common mistake the twelve percent example illustrates is anchoring on a comfortable monthly figure without checking it against the pot. KES 80,000 feels reasonable, but on KES 8 million it is an aggressive draw. A practical tip: if the tool reports the pot lasting fewer years than you expect to live in retirement, the lever with the most effect is usually the drawdown, not the growth assumption, because you control the former and only hope for the latter. This tool suits anyone approaching retirement who wants a reality check on a self-managed drawdown rather than buying a guaranteed annuity.
What drawdown would make my pot last indefinitely?
If your monthly withdrawal is smaller than the monthly growth on the balance, the pot never depletes, and this tool reports that it lasts over a hundred years. Roughly, that happens when your annual drawdown stays at or below your growth rate as a percentage of the pot, so at seven percent growth a draw near or under seven percent of the starting balance can be self-sustaining in nominal terms.
Is a higher growth assumption a safe way to draw more?
It is tempting but risky. A seven percent average hides bad years, and a market fall early in retirement while you are withdrawing can damage the pot in a way the average never recovers from. Treat the growth input as a planning estimate, keep the drawdown conservative, and revisit the numbers each year rather than setting and forgetting.
Should I combine drawdown with an annuity?
Many retirees do. Using part of the pot to buy a guaranteed annuity covers essential bills no matter how long you live, while keeping the rest in flexible drawdown for one-off costs. This calculator models the drawdown portion only, so size your annuity separately and run the remaining balance through here.