This New Zealand calculator compares a steady guaranteed income against managing your own drawdown. An annuity-style income gives certainty for life or a set term, while drawdown keeps your money invested with more flexibility but the risk it runs out. You enter your lump sum, an annuity income, a drawdown amount and an expected return, and the tool shows each income and how long the drawdown lasts, so you can weigh certainty against flexibility.
An annuity removes the risk of running out but usually leaves nothing behind; drawdown is flexible and can leave a balance but may run out. Many people blend the two. Estimate only, not financial advice.
The calculator shows the guaranteed income an annuity-style product would pay from your lump sum, then models the drawdown, keeping the lump sum invested at your expected return while you withdraw your chosen amount each year, and counts how long it lasts. If the drawdown would last well beyond a typical retirement, it leans toward drawdown for flexibility; if it would run out early, the certainty of the guaranteed income looks stronger.
On a $500,000 lump sum, a guaranteed income of $28,000 a year is paid for life. Drawing the same $28,000 a year at a 4% return, the drawdown lasts around 24 years before running out, so someone retiring at 65 might prefer the certainty, while someone wanting flexibility and a possible inheritance might prefer drawdown.
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