Pension Rollover Withdrawal Calculator

You've rolled your pension lump sum to an IRA. Now the question shifts: how long will the money last — and how much can you safely withdraw each month? Enter your balance, withdrawal target, and return assumptions to see a year-by-year projection and a sustainability analysis across return scenarios.

What this calculator assumes

• Constant investment return. Real portfolios don't return exactly 6% every year. Sequence-of-returns risk (a major bear market in years 1–5 of retirement) can deplete an IRA years earlier than averages suggest, even if the 30-year average return matches. The sensitivity table below is not a substitute for Monte Carlo planning.
• No partial pension annuity income. Enter only the monthly withdrawal gap your IRA must cover. If you're receiving $2,200/month from a pension annuity and Social Security, and you need $5,000/month total, enter $2,800 as your monthly withdrawal — not $5,000.
• No lump-sum withdrawals. The calculator models constant (inflation-adjusted) monthly withdrawals. One-time large withdrawals (medical, home repair, estate gifting) are not modeled.
• Tax-deferred IRA growth. Withdrawals from a traditional IRA are taxed as ordinary income. The balance shown is pre-tax. Your after-tax income will be lower — typically by 12–22% depending on your bracket and other income.

The 4% rule — and why it's a starting point, not a prescription

The widely-cited 4% rule — withdraw 4% of your starting balance annually, inflation-adjusted — comes from the Bengen (1994) and Trinity Study (1998) research showing this rate has historically sustained a 30-year retirement across most market scenarios. For a $750,000 rollover, 4% = $30,000/year = $2,500/month.

But "has historically sustained" comes with caveats that matter specifically for pension rollover holders:

• Starting sequence matters. The 4% rule was tested against 30-year historical windows. A 2000 or 2008 retirement start would have stressed it more than a 1990 start.
• You may not need 30 years. If you're 70 with $600K rolled over and other retirement income (pension annuity + Social Security), you might only need the IRA to last to age 88. Different math.
• You may have hybrid income. Pension rollover holders often have other guaranteed income streams (pension annuity, Social Security, spouse's income). The IRA is a supplement, not the entire retirement income base — this typically allows a higher withdrawal rate.
• RMDs change the equation after 73 or 75. Required Minimum Distributions from a traditional IRA begin at age 73 (if born 1951–1959) or 75 (if born 1960+). The RMD formula may force withdrawals larger than your spending needs, creating taxable income whether you want it or not.

Sequence-of-returns risk: the early years determine the outcome

Averages are misleading in retirement drawdown. If your IRA earns −30% in year 1 and +30% in year 2, you don't break even — you lose more than you gained, because you withdrew from a depleted base. A portfolio averaging 6% over 30 years with a bad first decade produces far less total wealth than the same 6% average with the bad decade at the end.

For a $750,000 IRA at $3,500/month withdrawals:

• At steady 6%: lasts to approximately age 87 (try it in the calculator above)
• At −20% return in year 1, then steady 6.7% (same 30-year average): may deplete 5–8 years earlier
• At steady 4%: lasts to approximately age 83

This is why many retirement planners use a "bond buffer" or "bucket strategy" — keeping 2–3 years of withdrawals in short-term fixed income to avoid selling equities into a down market during the critical early years.

RMD requirements for a traditional IRA rollover

When you roll a pension lump sum into a traditional (pre-tax) IRA, the account is subject to Required Minimum Distributions. The IRS mandates you withdraw a minimum amount each year, based on the Uniform Lifetime Table divisor for your age:

• Born 1951–1959: RMDs begin at age 73 (SECURE 2.0 Act, §107)
• Born 1960 or later: RMDs begin at age 75 (SECURE 2.0 Act, §107)

At age 75 with a $600,000 IRA, the RMD is approximately $22,222 ($600K ÷ 27.0 divisor from the Uniform Lifetime Table). If your planned withdrawal is only $18,000/year, the IRS forces you to take $22,222 — creating taxable income whether you need it or not, and potentially triggering IRMAA Medicare surcharges.

Strategies to manage RMD risk: Roth IRA conversions during ages 60–72 reduce the traditional IRA balance subject to RMDs. A QLAC (Qualified Longevity Annuity Contract) can shelter up to $210,000 from RMDs until age 85.¹

When to involve a financial advisor

This calculator gives you a planning baseline. An advisor is essential when:

• Your IRA is the primary retirement income source (no pension annuity, minimal Social Security)
• You have a large balance ($500K+) that will generate substantial RMDs
• You're within 5 years of needing withdrawals — sequence risk is highest in this window
• You need to coordinate IRA withdrawals with pension income, Social Security timing, and IRMAA management
• You're considering Roth conversions to reduce future RMD exposure

Fee-only advisors (no commissions, no AUM conflict) are the right choice for this analysis. See our guide on how to evaluate and choose a pension rollover specialist.