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How to Calculate Retirement Income

Calculate sustainable monthly retirement income from your portfolio using the 4% rule.

The Formula

monthlyIncome = portfolio * 0.04 / 12

The retirement income formula uses the mathematical relationship: monthlyIncome = portfolio * 0.04 / 12. Each variable in the formula represents a measurable quantity that affects the final result.

Step-by-Step Method

  1. 1Identify all input values needed for the retirement income calculation.
  2. 2Substitute your known values into the formula: monthlyIncome = portfolio * 0.04 / 12.
  3. 3Perform the arithmetic operations in the correct order (PEMDAS/BODMAS).
  4. 4Check that your result has the correct units and is within a reasonable range.
  5. 5Verify using the interactive Retirement Income Calculator to confirm your answer.

Related Topics

retirement income4% rulewithdrawalportfolio

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