Home
Back
Investment Formula:
| From: | To: |
The Investment Calculator With Monthly Withdrawals estimates the future value of an investment while accounting for regular monthly withdrawals. It helps investors understand how their portfolio might grow or decline over time with systematic withdrawals.
The calculator uses the investment formula:
Where:
Explanation: The formula calculates compound growth of the principal while subtracting the future value of a series of monthly withdrawals.
Details: Accurate future value estimation is crucial for retirement planning, investment strategy development, and understanding the long-term impact of regular withdrawals on investment portfolios.
Tips: Enter principal in dollars, monthly interest rate as a decimal (e.g., 0.005 for 0.5%), number of months, and monthly withdrawal amount. All values must be valid positive numbers.
Q1: What happens if withdrawals exceed investment growth?
A: The future value will decrease over time, potentially depleting the principal if withdrawals consistently exceed returns.
Q2: How should I determine the monthly interest rate?
A: Divide your annual expected return rate by 12. For example, 6% annual return = 0.06/12 = 0.005 monthly rate.
Q3: Can this calculator handle variable rates or withdrawals?
A: No, this calculator assumes constant monthly interest rates and withdrawal amounts throughout the investment period.
Q4: What's a sustainable withdrawal rate?
A: The 4% rule is commonly used for retirement planning, but sustainable rates depend on investment returns, inflation, and portfolio composition.
Q5: Does this account for taxes or fees?
A: No, this is a simplified calculation that doesn't factor in taxes, investment fees, or inflation adjustments.