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<<Here's a somewhat more realistic calculation. Suppose you want to have $40,000 a year at age 65.
Figure $10,000 comes from Social Security (I am not a doom-and-gloom person on the topic of
Social Security). So you need to amass a principal that will produce $30,000 a year in income.
Suppose you can get Treasuries at 4%. Then you need $750,000 at age 65.>>

Here is reality. If you need $30,000 per year today, you will need $144,031 per year in 40 years to maintain your life style. (Assuming inflation at 4% per year.) In addition, if you assume more than about 8% total return, you are being overly optimistic.

A good rule of thumb is that you need a lump sum that is 20 times your income needs to prevent loss of capital. That means you would need $2,880,620 when you retire at age 65.

Regards, Jim
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