Using a withdrawal-rate method, you can estimate a target portfolio size. Then model your path with the retirement calculator.
Estimate it with Retirement| Rule | Portfolio needed |
|---|---|
| 4% withdrawal rule (standard) | ~$1,000,000 |
| 3% withdrawal rule (conservative) | ~$1,333,000 |
| 5% withdrawal rule (aggressive) | ~$800,000 |
| Starting age (retiring at 65) | Monthly investment needed at 7% |
|---|---|
| Age 25 (40 years) | ~$381/month |
| Age 30 (35 years) | ~$555/month |
| Age 35 (30 years) | ~$820/month |
| Age 40 (25 years) | ~$1,234/month |
| Age 45 (20 years) | ~$1,920/month |
Retiring on $40,000 a year requires a portfolio of around $1,000,000 using the standard 4% withdrawal rule — meaning you withdraw 4% of your portfolio annually, which history suggests a balanced portfolio can sustain indefinitely. For Australians, $40,000 a year is a modest but liveable retirement income, especially when combined with a paid off home and potential Age Pension entitlements. The earlier you start the easier it gets — starting at 25 requires just $381 a month, while waiting until 45 means needing $1,920 a month to reach the same goal. Use the retirement calculator above to model your own timeline.
A simple method is: target portfolio = yearly income ÷ withdrawal rate.
Example: $40,000 ÷ 0.04 = $1,000,000 (before tax/fees).
Use these as rough starting points, not guarantees.
This is a simplified number. In practice you’d plan around after-tax spending and account types.
It’s a guideline, not a guarantee. Try 3–4% to see a conservative range.
If you expect guaranteed income later, your portfolio may not need to cover the full amount.
Yes — lower the income goal and compare targets.
Increase contributions, reduce spending, extend timeline, and keep fees low where possible.