Pension Drawdown Calculator

How a lump sum and monthly drawdown are split

Many registered retirement schemes in Kenya let you take part of your pot as a tax-free lump sum at retirement, with the remainder converted into an income — either a fixed annuity or a programmed withdrawal drawn down over a chosen number of years. This calculator illustrates that structure using a tax-free percentage, an assumed annuity rate, and a payment period you set yourself.

The exact tax-free limit is not a single number this calculator can state as fact — it depends on your specific scheme's rules and current KRA guidance. Treat the percentage field as your own working assumption, not a quoted legal threshold, and confirm the real figure with your scheme trustee or KRA before relying on it.

Worked example: the calculator's own defaults

On a KES 3,000,000 pot with a 33% assumed tax-free portion, the lump sum comes to KES 990,000, leaving KES 2,010,000 to annuitize. Spread over 15 years at an assumed 8% annuity rate, that balance supports an indicative monthly payment of roughly KES 19,200. Raise the assumed tax-free percentage and the lump sum grows while the monthly payment shrinks, since less of the pot is left to annuitize — the two move in opposite directions by design.

Annuity vs. programmed withdrawal

An annuity, usually purchased from an insurer, converts a lump sum into a fixed income for a set period or for life, priced on an assumed rate. A programmed withdrawal instead draws the remaining pot down directly over however many years you choose, with no insurer involved. This calculator models the annuity-style version — a level monthly payment over your chosen payment period, at the rate you enter.