Retirement planning / $5,000 a month / $60,000 a year
How much do I need to retire on $5,000 a month?
A common starting estimate is $1.5 million before taxes and other income. At 4%, that provides $60,000 in the first year—or $5,000 a month. Retiring early, paying taxes from the portfolio, or choosing a different investment mix can change the amount you need.
Start with $1.5 million, then test the retirement you actually plan to live.
Divide $60,000 by 4% and the result is $1.5 million. At a lower starting withdrawal, 3.5% points to about $1.71 million and 3% points to $2 million. These are arithmetic comparisons—not guaranteed safe withdrawal rates.
Enter what you have and what you plan to spend each month. The free planner compares all 24 tested portfolio strategies and shows the three that best matched your goal in our tests.
01 / The $10 million question
Do I need $10 million to retire?
There is no single retirement number. At the usual 4% starting estimate, a $10 million portfolio provides $400,000 in first-year withdrawals—or about $33,333 a month before tax. If your portfolio needs to provide $5,000 a month, the same starting arithmetic points to $1.5 million instead.
These are first-year withdrawals, not guaranteed income forever. Taxes, other income, how early you retire, what you invest in, and how much you want left later can move your number up or down.
Calculate my number and compare portfolios02 / What the $1.5 million estimate means
The 4% rule starts with $60,000, then raises that dollar amount with inflation.
The usual rule does not take 4% of whatever the portfolio is worth each year. It takes $60,000 in the first year, then adjusts that withdrawal for inflation. If inflation is 3%, the second year's withdrawal becomes $61,800 even if the portfolio fell.
The original historical research asked whether a portfolio could keep making those withdrawals for at least thirty years. It did not promise that the portfolio would never fall or preserve its starting value.
$1.5 million is a useful first estimate for $60,000 of first-year spending. It is not the finished retirement plan.
03 / What can move your target
Other income can lower the portfolio you need. Taxes and a longer retirement can raise it.
Social Security, a pension, rent, or part-time income can cover part of the $60,000. If outside income covers $20,000, the portfolio must initially supply $40,000 instead of the full $60,000.
The number can move the other way when $60,000 is the amount you want after tax, retirement may last well beyond thirty years, or investment costs are high. Flexible spending can help because it lets withdrawals fall after bad markets.
Start with the spending the portfolio itself must fund—not total household income before other sources and taxes.
04 / What should the money be invested in?
Compare portfolios against the same spending goal and the same market history.
The starting target and the investment mix belong in the same decision. More stocks can support more long-term growth but can also produce deeper losses. More defensive assets can soften some falls but may leave less growth for a long retirement.
The free FIRE planner starts with how much you have and the monthly spending you want. It then projects what you may have and compares three portfolio approaches against the same historical periods. No account is required, and the figures stay in your browser.
Calculate your target and compare portfolios05 / The practical answer
Use $1.5 million as the first line of the plan—not the last.
If the portfolio must provide the full $60,000 in year one, the common 25-times-spending estimate is $1.5 million. Then test a longer retirement, taxes, other income, different portfolios, and whether spending can change after a bad year.
If preserving the starting portfolio matters, test that as a separate goal. A withdrawal plan can last for its full test period and still finish with less money after inflation.
For the underlying distinction, read why the 4% rule does not guarantee the starting principal and why published starting rates can range from 3.9% to 4.7%.
How the estimate was calculated
The arithmetic, evidence, and limits
The calculation
$60,000 divided by 0.04 is $1,500,000. Dividing by 0.035 is $1,714,286, rounded to $1.71 million. Dividing by 0.03 is $2,000,000. The lower percentages are comparisons showing how the starting target changes; they are not recommendations.
The source behind the 4% starting estimate
William Bengen's original 1994 research tested inflation-adjusted withdrawals across historical thirty-year retirements. The 25-times-spending shortcut is the inverse of a 4% first withdrawal.
What this answer does not include
This page does not calculate taxes, Social Security, pension income, healthcare costs, estate goals, or a personalized withdrawal rate. Historical results do not guarantee a future outcome. This is educational research, not personal financial advice.
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