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https://reddit.com/r/financialindependence https://reddit.com/r/financialindependence $1m invested correctly will net you $40k/yr, before taxes, in perpetual i
by garmaine 6y ago
https://reddit.com/r/financialindependence https://reddit.com/r/financialindependence
$1m invested correctly will net you $40k/yr, before taxes, in perpetual income. So you’ll need more than $2.5m to live off at your expected annual expenses of $100k.
- wetpaws 6y agoThis guy fires
- garmaine 6y agoNot currently FIRE, but close to it.
- refurb 6y agoThis is a handy rule of thumb. On average, you can pull 4% from a balanced portfolio and it should last in perpetuity. Again, on average, across a range of scenarios. So $1M nets you $40k, before tax or around $33k after tax (assuming no-state tax state of residence). That's $3k per month free and clear, which would be doable a single person in a LCOL area, even having to pony up for a high-deductible health insurance plan. You'd have almost nothing left at the end of the month, but that's the plan? Edit: Good point below - most/all of the returns will be capital gains and the rate is 0% under $40k (which should be easy to keep below, since you'd be selling a percentage of initial investment + returns)
- reducesuffering 6y agoSince accruals and dividends will mostly be capital gains, and the 0% tax bracket for federal cap. gains goes up to 40k, the 40k will still be just under 40k after taxes (assuming no state).
- kangnkodos 6y agoThis is the best advice here, by far. If you don't want to live on $40K/year, another option to consider is getting a lower stress job at a lower salary, while withdrawing $40K/year.