Income Goal Calculator: How Much Capital Do You Need?

Income based goal calculator

Work out the capital you need to fund a given income, and the multiple of that income it represents.

How much income do you want each year?

In today's money, before tax. If a state or workplace pension covers part of the spending, enter only the shortfall the pot has to fund.

For how many years?

years

How long the money has to last. A 30 year horizon is the usual starting point.

Expected return

Before charges

Inflation

Long run

Total charges

Platform, funds, advice

What happens to the capital? The pot still buys the same as it does today when the term ends.

What happens to the income? The income keeps its buying power all the way through.

Advanced settings

Taking the income at the start of each year rather than the end means the first payment never gets a year of growth, which raises the pot needed by roughly 3 to 4 per cent.

When is the income taken?

Education only. This is not personal financial advice or a recommendation. The model assumes the same return every single year, so it tells you nothing about sequence risk, the danger of poor returns landing in the early years while the pot is still large. Tax on withdrawals is ignored. Capital is at risk when you invest.

Your results

Enter an income to see the capital you need.

£—

— x your annual income

Real return: —

Starting withdrawal rate

—

Real return after charges

—

Total income drawn

£—

Capital left at the end

£—

What happens to the pot

Capital year by year, in today's money and in cash terms

Today's money Cash terms

Reading this: the multiple is simply the capital divided by the income. The familiar 25 times rule is the special case where the income rises with inflation, the pot keeps its buying power and the real return after charges is 4 per cent a year.