Withdrawal Plan Calculator: Living Off Your Portfolio, Realistically Modelled
The key question of the drawdown phase isn’t “How much can I withdraw?” but “How long does the portfolio last at which withdrawal?”. If you model this with average returns only, you systematically underestimate two factors: sequence-of-returns risk and German taxes, which apply on every sale under the FIFO principle.
With or without capital depletion: two very different numbers
Without depleting capital you only withdraw the real return — the portfolio is preserved nominally. On €500,000 at a conservative 3% real withdrawal that is €1,250 per month, theoretically forever. With capital depletion the possible withdrawal rises markedly: the same €500,000 supports roughly €2,200–2,400 in real terms over 30 years at around 5% nominal return and 2% inflation — with the portfolio exhausted at the end. The range between the two models is the real design space that the 4% rule only covers roughly.
| Model | Monthly withdrawal (€500,000) | Portfolio after 30 years |
|---|---|---|
| No depletion (3% real) | around €1,250 | preserved in real terms |
| Depletion, 30 years | around €2,200–2,400 | €0 |
| 4% rule (static) | around €1,670 + inflation adjustment | historically mostly > 0, not guaranteed |
Forecasts and simulations based on your actual portfolio instead of sample values – free with MoneyPeak.
Sequence-of-returns risk: why the average lies
Two retirees with identical average returns can end up in completely different places: whoever hits a crash in the first five years while withdrawing locks in losses that later recoveries can no longer offset. Countermeasures:
- Cash buffer: 2–3 years of withdrawals in a savings account or money market ETF to draw from during weak phases.
- Dynamic withdrawal: tie the withdrawal to the portfolio value (e.g. fixed percentage with guardrails) instead of rigid inflation adjustment.
- Plan for flexibility: being able to withdraw 10–20% less in crash years drastically extends portfolio survival.
Don’t forget taxes: FIFO eats along
Every withdrawal is a sale — and German brokers sell under the FIFO principle: oldest units first, which are exactly the ones with the largest gains. The gain portion is taxed at 26.375%, softened to an effective ~18.5% for equity ETFs via the 30% partial exemption. Practically: to net €2,000 you need to withdraw more like €2,200–2,400 gross, depending on your gain ratio. A realistic withdrawal plan calculates gross — and credits Vorabpauschale amounts already taxed, which reduce the tax due on sale.
Frequently asked questions
How long does €500,000 last at €2,000 monthly withdrawals?
At around 5% nominal return, 2% inflation and inflation-adjusted withdrawals, typically about 30 years — before tax. With taxes and a bad sequence of returns it can be considerably less, so plan with a buffer and dynamic rules.
Static or dynamic withdrawal — which is better?
Dynamic rules (withdrawal as a percentage of the current portfolio value with guardrails) cut the risk of ruin markedly but reduce monthly budget predictability. A mix with a cash buffer is the practical compromise for most.
How much do taxes really reduce withdrawals?
Under FIFO, the oldest units with the largest gains are sold first. With a high gain ratio, an effective 15–18% of each withdrawal goes to the tax office — the difference between a gross and a net withdrawal plan is substantial.
Forecasts and simulations based on your actual portfolio instead of sample values – free with MoneyPeak.