Annuity Versus Drawdown Path
Calculator
Results
- Annuity income
- $17,600.00
- Portfolio withdrawal
- $26,400.00
- Ending balance
- $16,962.75
- Years funded
- 30 yr
Portfolio balance path
- Ending balance
- Cumulative withdrawn
Year-by-year portfolio projection
| 1 | 26,400.00 | 18,144.00 | 471,744.00 | 26,400.00 |
| 2 | 26,400.00 | 17,813.76 | 463,157.76 | 52,800.00 |
| 3 | 26,400.00 | 17,470.31 | 454,228.07 | 79,200.00 |
| 4 | 26,400.00 | 17,113.12 | 444,941.19 | 105,600.00 |
| 5 | 26,400.00 | 16,741.65 | 435,282.84 | 132,000.00 |
| 6 | 26,400.00 | 16,355.31 | 425,238.15 | 158,400.00 |
| 7 | 26,400.00 | 15,953.53 | 414,791.68 | 184,800.00 |
| 8 | 26,400.00 | 15,535.67 | 403,927.35 | 211,200.00 |
| 9 | 26,400.00 | 15,101.09 | 392,628.44 | 237,600.00 |
| 10 | 26,400.00 | 14,649.14 | 380,877.58 | 264,000.00 |
| 11 | 26,400.00 | 14,179.10 | 368,656.68 | 290,400.00 |
| 12 | 26,400.00 | 13,690.27 | 355,946.95 | 316,800.00 |
| 13 | 26,400.00 | 13,181.88 | 342,728.83 | 343,200.00 |
| 14 | 26,400.00 | 12,653.15 | 328,981.98 | 369,600.00 |
| 15 | 26,400.00 | 12,103.28 | 314,685.26 | 396,000.00 |
| 16 | 26,400.00 | 11,531.41 | 299,816.67 | 422,400.00 |
| 17 | 26,400.00 | 10,936.67 | 284,353.34 | 448,800.00 |
| 18 | 26,400.00 | 10,318.13 | 268,271.47 | 475,200.00 |
| 19 | 26,400.00 | 9,674.86 | 251,546.33 | 501,600.00 |
| 20 | 26,400.00 | 9,005.85 | 234,152.18 | 528,000.00 |
| 21 | 26,400.00 | 8,310.09 | 216,062.27 | 554,400.00 |
| 22 | 26,400.00 | 7,586.49 | 197,248.76 | 580,800.00 |
| 23 | 26,400.00 | 6,833.95 | 177,682.71 | 607,200.00 |
| 24 | 26,400.00 | 6,051.31 | 157,334.02 | 633,600.00 |
| 25 | 26,400.00 | 5,237.36 | 136,171.38 | 660,000.00 |
| 26 | 26,400.00 | 4,390.86 | 114,162.24 | 686,400.00 |
| 27 | 26,400.00 | 3,510.49 | 91,272.73 | 712,800.00 |
| 28 | 26,400.00 | 2,594.91 | 67,467.63 | 739,200.00 |
| 29 | 26,400.00 | 1,642.71 | 42,710.34 | 765,600.00 |
| 30 | 26,400.00 | 652.41 | 16,962.75 | 792,000.00 |
Comparison
| Scenario | Ending balance | Total withdrawn | Years funded |
|---|---|---|---|
| Baseline scenario | 28,271.26 | 1,320,000.00 | 30.00 |
| Selected scenario | 16,962.75 | 1,320,000.00 | 30.00 |
Formula
annuity income = B × share × payout; portfolio covers the rest= 17600.00
Note
This is not financial advice. It is a simplified model: it applies the displayed formula to the figures you entered, uses a single constant rate for every year unless you supplied more, and ignores taxes, fees, product charges and any country's specific pension, benefit or minimum-distribution rules. Sequence-of-returns risk and longevity risk are real: a run of poor early years can exhaust a portfolio that the average return alone calls safe, and living longer than projected is the risk this page cannot price. Real returns can be negative. Consult a licensed adviser before acting on any figure here.
More in Retirement drawdown
See all →Frequently asked questions
What's the fundamental trade-off between an annuity and drawdown?+
An annuity converts a lump sum into a guaranteed income stream for life, transferring longevity and market risk to the insurer, usually in exchange for giving up access to the principal and any market upside. Drawdown keeps the money invested and under your control, but you bear the risk of running out or of market losses.
Why might the annuity option show a lower total payout in this comparison?+
Because the insurer prices in profit margins, administrative costs, and the risk that some annuitants live a very long time, the average payout is often lower than what a self-managed portfolio could produce if returns are good and the retiree doesn't live unusually long. The annuity's value is the guarantee, not necessarily the expected total.
Does the drawdown path assume a fixed return every year?+
Typically yes, for simplicity — a constant average return is used to project the drawdown balance over time. Real returns will vary, so the drawdown side of this comparison carries more uncertainty than the fixed annuity payment shown alongside it.
What happens if I die early under each option?+
With most annuities, income stops or is greatly reduced at death unless you paid for a guarantee period or survivor benefit, meaning unused value can be lost to the estate. With drawdown, any remaining balance passes to your heirs, which is a key reason some retirees prefer to keep at least part of their savings in a drawdown account.
Can I mix both strategies instead of choosing one?+
Yes, and many retirees do — annuitizing enough to cover essential fixed expenses while keeping the rest in a drawdown portfolio for flexibility and growth. This calculator is meant to show the pure trade-off at the extremes; a blended plan sits somewhere between the two paths shown.