$3 million invested with a 2% dividend yield will get you $60k a year. Which is slightly lower than the average yearly income in the US
this post was submitted on 08 Feb 2026
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Desperately
You could make an argument that's a big gamble if you're expecting to use up the principal at all. So, 10x what you use in a typical year would be an absolute minimum, and that would involve an aggressive portfolio that you run down when the market is bad and earn back later. 20x or 30x would be more comfortable, especially if there's a chance you're going to spend more than you did when working.
A bit of a hack people do make work is moving to a poor country where costs of living are lower. Then the question is how much lower can you actually get it, which is both about your personality and interests and how poor a place you're willing to consider. Obviously, you can make $2 a day work, if you eat only corn and squat all day under a piece of aluminum. If you want to live the exact same way as at home down to brands, far afield can end up more expensive.
As others have mentioned, the common guidance is to figure out your annual expenses, i.e how much you need to live off of, and divide that by safe withdrawal rate (typically ~4% based on the Trinity study) to come up with a total amount needed to retire early. So for example, if you determine you need $60k/year, the formula would suggest saving $1.5M (60,000 ÷ 0.04 = 1.5M).
The basic idea is save a big enough nest egg so that you can live solely off interest, meaning you never touch the principal and your account grows in perpetuity.
The hard part is two-fold IMO:
- Estimating your average annual expenses is difficult due to lots of variables, e.g.
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Health care costs vary greatly (if you don't have access to public healthcare depending on your country) and tend to increase with age
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Housing costs are situational and can either decrease (if you own your own home and payoff your mortgage) or increase if you rent or have to move/refinance/etc.
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Your family size may change. Kids can greatly throw off projections. Taking care of elderly parents. Having a partner start or stop working. All these things can impact your assumptions. Therefore, it's usually good to add some buffer.
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Inflation should also be accounted for. This can be difficult to project for the remainder of your life, so some tend to just look at historical inflation, but there's no guarantee the future will follow the same trend. Same for lifestyle creep, but that's (usually) more controllable.
- How to choose what investments will allow you to earn a return in excess of your withdrawal rate. For example, if you're withdrawing 4%, you need your investments to earn a higher rate than that to avoid having to dip into your principal.
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The common guidance (from say Buffet, Bolgeheads, etc.) for most people is to invest in low-cost index funds (availability depends on your country). I emphasize "low-cost" because there was another study that showed the only sure-fire predictor of alpha (performance above a certain benchmark, like the S&P 500 if you're in the US) is the having low management fees. Historically, this should return anywhere from 5-10% but again past performance is not indicative of future returns.
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While you're young and have more time in the market, you genreally want to invest in higher risk/higher reward type investments. Idea being you benefit from higher returns while having more time to weather downturns. Then as you age, you can shift towards lower risk/lower reward investments, like bonds, so you're not as exposed to market fluctuations.
One last thought, there are also variations of FIRE, like Barista FiRE, Coast FIRE, where you don't have to completely stop working but are financially independent so you can choose where/how hard to work.
Good luck,
Roughly 20 something times your annual expenses.
There is a whole movement on the Internet called FIRE (financial independence, retire early) if you want to go down that rabbit hole
@favoredponcho@lemmy.zip This is the correct answer.
As another commenter said, it depends a lot on your lifestyle goals. Obviously the answer will be different if you want to spend your time sleeping in a hammock on a beach in Nicaragua eating whatever fruit grows on the nearby trees, versus if you want to pop champagne on your yacht every night with IG models. This is the biggest split in the FIRE community - leanFIRE, or fatFIRE. LeanFIRE emphasizes reducing lifestyle cost in order to retire earlier, while fatFIRE emphasizes increasing income in order to enjoy a more luxurious retirement. As a lemming, I think I am safe in assuming you are more interested in the former.
So then, among leanFIRE, you should decide exactly what flavor you want to pursue.
A fairly traditional leanFIRE would be something like working a somewhat lucrative job, like software or accounting, while you live a very modest life. eg, buying a house, renting it out, and then building yourself a tiny house in the back yard to live in, so you can live rent free. Keeping some chickens and a vegetable garden, and riding a bicycle for most of your transportation needs. You then work your job, saving as much money as possible until you have 20x your annual COL in some stable index funds, and then you quit.
An important note here is that for this to be worth it, your leanFIRE must not be a "starvation FIRE". You can be happy living a modest lifestyle, and you can learn to be happy living an even more modest lifestyle - but if you aren't happy with the lifestyle you are building for yourself, then what is the point? So probably the biggest asterisk in all of this is that YOU SHOULD NOT BE WAITING FOR RETIREMENT TO MAKE YOU HAPPY. If you are accepting misery during the period in your life when you are working 9-5 and hoping that quitting your job will make you happier, then you are, at best, simply delaying being happy for years. Because while your happiness can be influenced by ourside factors, at the end of the day, happiness is about what is going on in your head, not what is going on in the world. So regardless of your flavor of retirement, retiring should be about going from happy to happier, not about going from misery to happiness - because the latter ends up actually being a transition from misery to misery but with more free time. So if you are eating rice and beans shivering in a cold apartment in order to save a few bucks to retire sooner, and you hate it, then this is counterproductive. If you are miserable in your life right now, I won't tell you not to work towards FIRE. And I won't tell you not to tighten your belt and suffer a little. But at the same time, you should recognize that the biggest thing that will impact your happiness is accepting that you have the ability to be happy right now, and working on that at the same time.
Anyway, suppose you want to get to a semi-retirement even sooner. One strategy here is coastFIRE. This is where you plow money into your investments as quickly as possible so that they will then eventually reach maturity at a traditional retirement age as long as you don't touch them ahead of time. So suppose you are happy living on 20k/yr. The 4% rule says you need $400k in the market as principle. So then your goal is to put enough money in the market so that you will have $400k when you are at traditional retirement age - which depending on how old you are right now, is significantly less because of the power of compound interest. Lets do some math.
PV (present value) = how much you need invested when you hit coastFIRE such that you will have 400k in the bank at retirement age.
FV (future value) = 400k. The amount you want invested when you start withdrawling cash to live on.
r = anticipated real annual return (all these numbers are inflation-adjusted. That's the "real" part)
n = number of years in the market. The difference between your official retirement date and your coastFIRE date.
The formula is PV = FV/(1+r)^n
So suppose you want to hit coastFIRE at 30, and retire at 60. So n is 30. And lets assume a conservative 7% real return in the market. Then
PV = FV/(1+r)^n = 400000/(1.07)^30 = $52,200
So plunk $52,000 in your 401k, and now you only need to work to cover your living expenses. Which you can do as an accountant by, say, just working during tax season. Or as a software developer by just picking up occasional contract gigs.
Another option here is what is called baristaFIRE. This is coastFIRE, but rather than continue working your lucritive (but often unenjoyable and stressful) job, you switch to working a job you enjoy. For many people, that might be being a barista. Or it could be any number of similar enjoyable but low paying jobs, like raft guiding or teaching martial arts or making art. This is currently my strategy, where I work as a rigger for concerts for part of the year, then bounce and do whatever for most of the rest.
And another option to consider is what is called geoarbitrage. This is essentially just moving somewhere with a lower cost of living before or after retirement. For example, if you get a software job in SF, then get a remote work option and move to Thailand and decide you want to live the rest of your life there, you can retire very quickly.
So if you want to retire early, your main priority is creating a lifestyle you are happy with which has as low of annual expenses as possible.
Then, don't neglect working to increase your income via chasing raises and promotions and switching companies.
Then, invest the difference in index funds (most traditional), real estate (a factor in most FIRE peoples portfolio, at least for their own residence), and/or a personal/local business (highest yield, but the most work and biggest risk).
Finally, do note that by pursuing early retirement, you are officially a capitalist. You are using the money you earned as the investment capital of some sort of business enterprise, and are then getting paid by the enterprise for the privilege of using your money. So everyone here hates you. Sorry.
You forgot inflation. If you are happy with 40k today that could be 80k by the time you retire and likely will be over 150k by the time you die.
It's not generally possible any more
Generally it never was.
(Or even late or never, globally. The ancient system involves your kids paying for your way)
Your question is too vague. It all depends on what you consider an acceptable lifestyle and also what area of the world plays a huge part.
All depends on how long you'll live, your health, and your lifestyle. Big big variables.
A. Lot. I really need to retire early especially since I am out of work at the moment so now would be ideal or better yet a year ago. Wish I had the money to though.
Depends on what standard of living you're used to. 😉
My mortgage is $2,200 a month, $26,400 a year.
Add to that other bills, living expenses, etc. I could probably get by on $50K or $60K a year.
Now then... lifespan. If you expect to live another 30 years (unlikely for me, but possible), that's between $1.5M and $1.8M.
im in the us so a third of my expenses are medical. last I checked and I have not really wanted to do the math again as everything is way up. I would need 6k a month so 72k a year but that is after taxes so would need to be more like 90k. This was as of almost 2 years ago though so it would be higher now.
I'd probably retire right now if I had $5M
Seems about right, I estimated about €4M
Depends how long you live
And how your savings are spent, and the interest rates you get on what you got
Live till 80, sure
But what if you live till youre 110?
One million invested to the stock market gives you roughly ~~70k~~ 40k returns yearly and you get to keep the million.
No. Simply no. The rule is 4% or a little more. Not 7%.
That depends - 3% is a safe withdrawal rate gowing your income with inflation and not running out. However you won't live forever and so can touch some principal and so can go higher - how much is the question.
I stand corrected. I imagined that 10% average growth on the S&P500 would make 7% a safe rate.
For more information check out Bill Bengen (he discovered the rule) or the Trinity study!
$200k and live frugllay, that should also allow you to grow your capital a little each year.
$400k and live frugally is easily doable, in 20 years you shoukd be well ahead a d have had your own time.
Couple caveats, no kids, live in SE Asia minimally explorng the world.
I quit work at 40 and am now 60.
Use your favorite search engine to look for the trinity study and safe withdrawal rates. as a rough number: your yearly spending x 24.
It really depends on the lifestyle you want and what "retirement" means to you. Do you want to never work again or work part time? So you want to live in a home with no mortgage and minimal bills or travel the world for 6 months of every year. Your best bet is to talk to a financial advisor.
I would really not recommend talking to a financial advisor about this without really knowing what you want. They are, by their nature, quite financially conservative, and their main clientele are people who are in their 50s or older. "Retiring early" to them, means retiring at 58.
Uh, I’ve had a financial advisor since my 20s…
Biggest thing is getting one that is a fiduciary.
I also take it you’re young, due to your snark, since retiring at 58 is a dream most will never see.
Seriously, how many people in their 50s do you directly know that are or have retired?
I retired at 32. This is what most people mean when they talk about early retirement. See my much longer comment in this thread.
A financial advisor you pay is working for you
One who is “free” is a salesperson.
There’s good and bad advisors on both sides, but it’s important to know. There’s people out there paying over 5% management fees.
For serious inquiries: Talk to a competent local CFP at a fiduciary. A good one will run modeling on your situation and give solid advice. There are many variables to account for.
Figure out how much you need to live yearly. Multiply by 25. Voila, your number.
Depending on where you intend to retire and your intended expenses during retirement, anywhere from 0 to billions.
If I get forced out of the workforce and have over 1.5m USD – I will have strong reservations about re-entering if I don’t find anything while collecting unemployment for 6 months.
After 2m I could see it affecting my work performance and attitude.
After 2.5m – if I haven’t gotten myself laid off yet – something must be wrong – like I have cancer or something.
Are you offering?
Assuming I live for another 30years, around $3mil to semi retire and $5mil to fully retire today. At least until I can fully draw from social security (if it still exists) and from 401k/IRAs.
But I don't plan to retire. I plan to work until I can't then give my wife and kids everything left. I have no reason to live except to ensure that I have given my family the best life I can within my means, assuming my spending vices don't get the better of me.
A lobotomy.
Just buy bitcoin, and get 0.1 BTC using DCA (dollar cost averaging) from a non-KYC exchange.