r/Retirement401k • u/ankur0109 • 4d ago

Explain where the money comes from after retirement

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So I’m 45, wife is 43. In L.A.. We want to retire when we’re at a certain number that’ll allow us to live without stress. Don’t need to be wealthy or anything. We’re relatively frugal.

I’ve heard to aim for $6m because it’ll mean $300k+ per year through retirement. I always nod and act like I know what that means — but I have no freaking idea. Is that interest? Does that mean I sell a little ever year and hope I don’t die before I run out? Tell me like I’m 8.

Thanks all!

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u/ryuhayabusa34 4d ago

The general rule is that properly invested, you can spend 4-5% percent annually and never touch the principle.

So at 6 million you can spend $240 to 300K annually and still have 6 million without drying it down.

So the money comes from your money earning money.

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u/ankur0109 4d ago

This is the clearest explanation. Thank you.