We’re aiming for $2.5-$3 million in investment income. That’s based on two things:
The median household incomes in the US is about $80,000.
The safe indefinite withdraw rate in stock index funds is about 3%.
(2) is based on the 3% rule, a common retirement planning tool. People have crunched the numbers on historic market returns, factoring in inflation, dividends, etc. 3% is about the amount you can safely withdraw each year while the principal will still remain steady through time, even after adjusting for inflation and crashes. It is the amount you use if you want to be reasonably certain you will not outlive your retirement income.
We’re aiming for $2.5-$3 million in investment income. That’s based on two things:
(2) is based on the 3% rule, a common retirement planning tool. People have crunched the numbers on historic market returns, factoring in inflation, dividends, etc. 3% is about the amount you can safely withdraw each year while the principal will still remain steady through time, even after adjusting for inflation and crashes. It is the amount you use if you want to be reasonably certain you will not outlive your retirement income.