Legacy vs Spend-Down Calculator
Compare preserving your portfolio to leave an inheritance against spending it down to zero, and see how much more you could spend.
How it works
Spend to zero = balance ÷ annuity factor · Preserve principal = balance × real return · With legacy = (balance − PV of legacy) ÷ annuity factor
How much you can spend depends entirely on what you want to leave behind. Spending only your real earnings preserves the whole portfolio in today's dollars for heirs but limits your lifestyle. Spending down to zero maximizes what you can enjoy but leaves nothing. This tool prices all three — full legacy, a chosen legacy, and none — in inflation-adjusted terms so you can see the true cost of an inheritance in forgone spending.
Worked example
On $1,000,000 over 30 years at a 3% real return, spending to zero supports about $51,000 a year, while living on earnings alone to preserve the full million for heirs allows $30,000 — so leaving that legacy costs roughly $21,000 of annual spending.
Frequently asked questions
Is it wrong to spend down to zero?
Not at all — "die with zero" is a deliberate strategy to maximize lived experience. The catch is timing: since you do not know your exact lifespan, spending to zero over a fixed horizon requires either an annuity or a conservative end age to avoid running out early.
How is spending to preserve principal calculated?
You spend only the real return each year, so the portfolio keeps its purchasing power. On a 3% real return, that is 3% of the balance annually, leaving the full inflation-adjusted principal for heirs.
Why is the legacy discounted?
A legacy specified in today's dollars must keep its purchasing power to the end of the horizon, so its present value is set aside first and the rest funds spending.
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Educational estimate using simplified assumptions — real returns, taxes and fees vary. Not financial advice.