How much a month in retirement?

A capital is not an answer

Ask any retirement calculator what you will have accumulated and it returns a six-figure number. That number means nothing until you know two things: how much it pays a month, and what that month will actually buy.

Start with the second, because it is the harsher one. At 2 % inflation — the central bank's target, so the low assumption — capital built over twenty-four years loses 38 % of its purchasing power on the way. The €400,000 on screen buys €249,000 of today's money. That is not a presentation detail: it is the difference between a comfortable retirement and a tight one. Which is why every amount on this page is given twice, and it is the same mechanism inflation applies to all of your wealth.

Then the first question: how much a month. There is not one answer but three, and the gap between them is wide. Living off the interest alone never touches the capital: the income is the lowest, but it never stops and your children inherit all of it. Drawing the capital down empties it at an age you set: the income can double, and nothing is left — not for you if you outlive that age, and not for anyone after.

The third is the one almost nobody computes. A flat €1,800 a month for thirty years does not buy the same in year one and year thirty: at 2 % inflation it has lost 45 % along the way. The indexed income starts lower and grows each year, so the last payment buys as much as the first. It is the only one of the three that keeps the promise you think you are buying when you read «€1,800 a month».

One last word on the end age. The reflex is to enter your life expectancy — and that is a mistake, because a life expectancy is an average: half of people live beyond it. Planning to 95 costs a lower income; planning to 82 and living to 92 costs ten years with no capital. Prudence is paid for once; imprudence is paid at the age when nothing can be done about it.

Plan through to

The age your income must last to. Setting it at your life expectancy is a coin flip on your old age: half of people live beyond it, and find themselves with no capital. Hence the 95 suggested by default.

Today's euros

What a future sum will be worth, expressed in what it buys now. At 2 % inflation, €1,000 in twenty-four years buys €621 — the only figure you can compare with your current budget.

Withdrawal rate

The share of capital taken out each year. Living off the interest alone means withdrawing exactly the return; drawing the capital down means withdrawing more, and exhausting it in the end.

Sequence of returns

The order in which good and bad years arrive. Two retirements with the same average return end very differently if one takes its fall early: you then withdraw from a reduced capital, and it never recovers.

The four figures to gather

1. 1

   What you already have

   PER, life insurance, PEA, savings accounts: everything earmarked for retirement, across every wrapper. It is half the result — the starting capital compounds for the whole period.

2. 2

   What you pay in

   The monthly amount, standing orders included. Over twenty years, an extra €100 a month weighs heavily; over five, far less. The horizon does the work, not the amount.

3. 3

   Your return assumptions

   Two rates, not one: the saving phase, and retirement — more cautious, because you de-risk as the date approaches. Stay modest: one point too many changes everything, and nobody guarantees it.

4. 4

   The age to plan through to

   Not your life expectancy. Take it wide: it is the only variable whose error is discovered too late to correct.

This calculator covers your PERSONAL savings only: state and occupational pensions add to it, and your career statement estimates those far better than we could. It also ignores the tax on withdrawals, which depends on the wrapper — precisely the question settled by the PER against the PEA. And it assumes a constant return, which markets are not: to test a path rather than an average, project how your wealth evolves, then [take stock of what you have today](netWorth).

Frequently asked questions