How long an RSA balance lasts under withdrawals.
Your pot lasts
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Months until depletion
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Withdrawal real value (yr 1)
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How programmed withdrawal works in Nigeria
When you retire under the Contributory Pension Scheme you have two main ways to turn your Retirement Savings Account into income: buy an annuity from a life insurer, or take programmed withdrawal through your Pension Fund Administrator. This calculator models the second route. Under programmed withdrawal your balance stays invested with your PFA and you draw a regular amount each month while the remainder keeps earning a return. The pension regulator, PenCom, sets the rules for how much you may draw and oversees the PFAs, so the figures you should confirm against your own statement come from your PFA, not from any tax authority. Pension income in retirement is also tax-favoured in Nigeria, which is part of why programmed withdrawal is attractive.
The tool asks for three things: your current RSA balance, the monthly amount you want to draw, and the annual return you expect the invested balance to earn. It then simulates month by month, growing the balance at one twelfth of your annual return, subtracting your withdrawal, and counting how many months pass before the pot runs dry. The return and inflation figures are the calculator's indicative assumptions for planning, not promised or regulated numbers, so adjust the return to match what your PFA's fund has actually delivered.
The two forces pulling on your pot
Every month two things happen in opposite directions. Investment growth adds to the balance, and your withdrawal takes from it. Whether your pot shrinks depends on which force is larger. If the monthly growth on your balance is at least as big as your withdrawal, the pot is self-sustaining and is never exhausted. The tool spots this and reports that your funds last indefinitely rather than running a pointless simulation. With the on-screen defaults of a NGN 50 million balance and a 12 percent return, monthly growth is NGN 500,000, which comfortably covers the default NGN 400,000 withdrawal, so the pot would last forever.
That is the boundary worth understanding. Push the withdrawal above the monthly growth and the balance starts to fall, slowly at first then faster, because each withdrawal shrinks the base that earns the next month's return. This is the same compounding that built your savings, now working in reverse.
Drawing NGN 700,000 a month from NGN 50 million
To show a pot that actually depletes, change the withdrawal to NGN 700,000 a month, keeping the NGN 50 million balance and the 12 percent return. Now monthly growth of NGN 500,000 no longer covers the NGN 700,000 draw, so the balance erodes by roughly NGN 200,000 in the first month and accelerates from there. The simulation runs to 126 months, which is 10 years and 6 months, before the account empties. Note that this example uses NGN 700,000, not the calculator's default NGN 400,000, so plug in your own number to see your timeline.
| After | Approximate balance |
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Why inflation is the quiet threat
A timeline measured in naira flatters the picture, because the naira loses value over time. The tool shows the real value of your first-year withdrawal after one year of inflation, using an indicative rate of 23 percent. On a NGN 700,000 monthly draw, that NGN 700,000 buys only about NGN 569,000 worth of goods a year later. The figure discounts a single year to make the erosion concrete, but the effect compounds for as long as you draw a fixed amount. This is the real risk in Nigerian retirement planning: a pot that lasts a comfortable decade on paper may feel threadbare halfway through once prices have climbed. A sensible response is to plan for a withdrawal that you can step up over time, or to lean on the self-sustaining boundary so growth keeps pace.
Can my PFA force me onto an annuity instead of programmed withdrawal?
No. At retirement you choose between programmed withdrawal through your PFA and a life annuity from a licensed insurer, subject to PenCom's rules on minimum income. This tool only models programmed withdrawal. Speak to your PFA and check PenCom guidance to compare the two before you commit, since the choice is difficult to reverse.
What return should I assume for my RSA?
Use what your fund has actually earned rather than a hopeful number. PFAs publish fund returns, and the multi-fund structure means a retiree's fund is usually more conservative than a younger saver's. The 12 percent default here is illustrative only. Lowering it shortens how long your pot lasts, so it is safer to test a cautious figure.