Multi-Generational Wealth Planner
Model how your wealth can support you, your children, and future generations. Enter starting portfolio value, growth assumptions, withdrawals, and transfer percentages to see a year-by-year projection of balances and legacy amounts.
Multi-generational wealth planning formulas
The multi-generational wealth planner uses a set of transparent formulas to approximate how a portfolio might evolve over time while supporting withdrawals and transfers to future generations. These formulas are intentionally simple so you can see the mechanics of growth, withdrawals, and legacy balances without needing a full actuarial model.
1. Real growth rate
Nominal return (decimal) = Annual return (%) ÷ 100
Inflation (decimal) = Inflation rate (%) ÷ 100
Real growth rate (decimal) ≈
(1 + Nominal return) ÷ (1 + Inflation) − 1
This formula converts your nominal return assumption into an approximate real growth rate after inflation. It helps you see how purchasing power evolves, not just nominal dollars.
2. Annual withdrawals for Generation 1
Gen 1 withdrawal rate (decimal) =
Gen 1 withdrawal rate (%) ÷ 100
Annual withdrawal for Gen 1 =
Starting portfolio value × Gen 1 withdrawal rate
For simplicity, the tool treats Gen 1 withdrawals as a fixed amount based on the starting portfolio. In reality, you might adjust withdrawals over time, but this constant approach makes the projection easier to interpret.
3. Year-by-year balance update before transfer
Year 0 balance = Starting portfolio value
For each year t before transfer year:
Growth_t = Balance_{t-1} × Real growth rate
Withdrawal_t = Annual withdrawal for Gen 1
Balance_t = max(0, Balance_{t-1} + Growth_t − Withdrawal_t)
This loop models how the portfolio changes each year as it grows and supports withdrawals. If withdrawals and growth deplete the portfolio, the balance is floored at zero.
4. Transfer to Generation 2
Transfer percentage (decimal) =
Transfer percentage (%) ÷ 100
Transfer amount at transfer year =
Balance_transfer_year × Transfer percentage
Gen 2 starting wealth =
Transfer amount at transfer year
Remaining Gen 1 wealth after transfer =
Balance_transfer_year − Transfer amount
At the chosen transfer year, a portion of the portfolio is moved to Gen 2. The schedule records both the amount transferred and the remaining wealth for Gen 1.
5. Generation 2 withdrawals and growth
Gen 2 withdrawal rate (decimal) =
Gen 2 withdrawal rate (%) ÷ 100
Annual withdrawal for Gen 2 =
Gen 2 starting wealth × Gen 2 withdrawal rate
For each year t after transfer:
Growth_t_gen2 = Balance_{t-1,gen2} × Real growth rate
Withdrawal_t_gen2 = Annual withdrawal for Gen 2
Balance_t_gen2 = max(0, Balance_{t-1,gen2} + Growth_t_gen2 − Withdrawal_t_gen2)
Gen 2 follows a similar pattern: the transferred wealth grows and supports withdrawals over the remaining horizon. The schedule shows both Gen 1 and Gen 2 balances where applicable.
6. Total withdrawals and ending wealth
Total withdrawals =
Sum of all Gen 1 withdrawals + Sum of all Gen 2 withdrawals
Ending wealth =
Balance at final year for Gen 1 + Balance at final year for Gen 2
These totals help you see how much wealth was consumed versus how much remained as potential legacy capital at the end of the planning horizon.
Real-world multi-generational planning involves taxes, account types, changing spending needs, and market volatility. This tool doesn’t attempt to capture every nuance. Instead, it gives you a clear, adjustable framework for thinking about how your assumptions translate into long-term outcomes for your family.
Designing a multi-generational wealth plan with numbers
Multi-generational wealth planning is about more than leaving a large number behind. It’s about deciding how your resources should support your life, your children, and future generations in a way that feels intentional. The multi-generational wealth planner turns that intention into a set of numbers you can explore, challenge, and refine.
Clarifying your starting point
Begin by defining the wealth you want to model. This might be your total investable portfolio, or a subset earmarked for long-term legacy. Enter that amount as the starting portfolio value, then choose an expected annual return and inflation rate. Many people use a conservative net return assumption—something like 4–6% after fees and taxes—and an inflation rate around 2–3%.
Next, decide how long you want to model. A 60-year horizon might cover your remaining lifetime plus the lives of your children. A longer horizon can represent grandchildren or even further generations. The tool doesn’t know who the people are; it simply shows how the capital behaves over time.
Thinking in terms of withdrawal rates
Withdrawal rates are a powerful way to connect lifestyle and sustainability. For Generation 1, you might choose a 3–4% annual withdrawal rate based on the starting portfolio, echoing common retirement planning rules of thumb. This rate becomes a fixed annual withdrawal in the model, which is easy to interpret even if real life would involve more nuance.
For Generation 2, you can choose a similar or different rate. A lower rate might reflect a desire to preserve capital, while a higher rate might reflect more aggressive spending. By modeling both generations, you can see whether your plan tends to exhaust the portfolio or leave a meaningful legacy at the end of the horizon.
Choosing a transfer year and percentage
The transfer year is where the model shifts from one generation to the next. You might set it to the year you expect to retire, the year you plan to make major gifts, or a milestone like age 80. The transfer percentage represents how much of the portfolio you move to the next generation at that time.
For example, imagine a starting portfolio of $2.5 million, a 6% nominal return, 2.5% inflation, a 60-year horizon, and a 4% withdrawal rate for both generations. You set the transfer year to 30 and the transfer percentage to 50%. The tool will show how the portfolio grows and supports your withdrawals for 30 years, then how half of the remaining wealth moves to Generation 2 and supports their withdrawals for the remaining 30 years.
By scanning the schedule, you can see whether the portfolio tends to grow, shrink, or hover around a stable level. You can also see how much wealth remains at the end of the horizon, which can represent a legacy for future generations or charitable causes.
Worked example
Suppose you enter:
- Starting portfolio value: $2,500,000
- Annual return: 6%
- Inflation: 2.5%
- Planning horizon: 60 years
- Gen 1 withdrawal rate: 4%
- Transfer year: 30
- Transfer percentage: 50%
- Gen 2 withdrawal rate: 4%
The tool will calculate a real growth rate, a fixed annual withdrawal for each generation, and a year-by-year schedule of balances. You might see that the portfolio grows in the early years, dips around the transfer, and then stabilizes or declines slowly as withdrawals continue. If the ending wealth feels too low or too high relative to your goals, you can adjust the withdrawal rates, transfer percentage, or horizon and rerun the scenario.
Practical tips
- Run multiple scenarios with different return assumptions to see how sensitive your plan is to market performance.
- Experiment with lower withdrawal rates to explore more conservative, preservation-focused strategies.
- Use the scenario label field to keep track of different plans, such as “Conservative legacy” or “High-support plan.”
- Export the CSV and share it with your financial planner or family members to spark deeper conversations.
- Remember that this tool doesn’t model taxes, account types, or volatility—use it as a starting point, not a final answer.
When you can see your multi-generational plan in numbers, it becomes easier to align your decisions with your values. You can choose how much to spend, how much to give, and how much to preserve with a clearer sense of the trade-offs involved.
Frequently Asked Questions
How many years can I model?
You can model up to 120 years. Longer horizons can represent multiple generations. Keep in mind that very long projections are highly sensitive to your assumptions, so it’s wise to run several scenarios.
What happens if withdrawals exceed growth?
If withdrawals and growth deplete the portfolio, the balance is floored at zero. The schedule will show when the wealth is exhausted, which can be a useful signal that your withdrawal rates or horizon may need adjustment.
Can I change withdrawals over time?
The current version uses fixed annual withdrawals based on starting wealth for each generation. To model changing withdrawals, you can export the CSV and modify the schedule in a spreadsheet, or run multiple scenarios with different rates.
Does the tool include taxes and fees?
No. Instead, you can set your annual return assumption to an after-tax, after-fee rate that reflects your situation. Detailed tax modeling is beyond the scope of this tool.
What if I don’t plan a specific transfer year?
You can set the transfer year near the end of the horizon or choose a small transfer percentage if you want most of the wealth to remain with Generation 1. The tool is flexible enough to represent many different planning philosophies.
Does the tool store my inputs?
The tool briefly stores your last inputs in localStorage to restore them after a refresh and auto-run the calculation. After restoration, the saved data is cleared. No information is sent to external services unless you enable analytics or ads via the cookie banner.
Related tools
Information on this site is for educational purposes only and is not financial, tax, or legal advice. Calculations are estimates and may not reflect actual results. See our Privacy Policy and Disclaimer.