How it is calculated
Amount needed = monthly income ÷ monthly return. Use a return after taxes and inflation, so the income keeps its purchasing power over the years.
Example
To receive $3,000 a month with a 4% real return, you need about $900,000. With $20,000 today and $800 a month, it takes about 37 years.
Frequently asked questions
Is this the same as the 4% rule?
Close. The <a href="/fire-calculator/">FIRE calculator</a> uses the 4% withdrawal rule, which also spends part of the principal over 30 years.
See also
Results are estimates for information only and are not financial, legal or medical advice. Rates, taxes and fees vary — confirm with a professional or your lender.