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34 Don’t Make Me Say I Told You So

investment return of 6% annually. This figure ignores the impact
of taxes on the account, which are due upon withdrawal.

To generate just $20,000 a year in investment income, here

is how much money you would need at various rates of return:

To generate just $20,000 a year in investment income,
here is how much money you would need at various rates of return:

Rate of Return Annual Income Cost of Income

1.0% $20,000 $2,000,000
1.5% $20,000 $1,333,333
2.0% $20,000 $1,000,000

2.5% $20,000 $800,000

3.0% $20,000 $666,666
3.5% $20,000 $571,428

4.0% $20,000 $500,000
4.5% $20,000 $444,444

5.0% $20,000 $400,000
5.5% $20,000 $363,636

Source: Transamerica; the rates of return do not represent the returns on any speci c investment.

Income Needs in Retirement

Let’s look at income needs in retirement. Here is a good way to
look at these expenses.

Chapter 2: You’ll Need More Money Than You Think