A drawdown calculator is a tool that helps you determine how much money you can withdraw from your retirement savings each year without depleting your savings too quickly. To calculate the amount of money you can withdraw each year, the calculator considers several factors such as your current savings, your expected rate of return, your life expectancy, and your desired income.
Here are the steps to use a drawdown calculator:
1. Input your current retirement savings balance.
2. Input your expected annual rate of return on your investments.
3. Input your desired annual retirement income.
4. Input your estimated life expectancy.
5. The calculator will then generate a recommended annual withdrawal rate that is likely to provide you with income throughout your retirement.
It is important to note that the results provided by a drawdown calculator are estimates and may not reflect your actual investment returns or expenses in retirement. It is always advisable to consult with a financial advisor to determine the most appropriate withdrawal strategy for your retirement.
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