Income Replacement Calculator
Calculate how much passive income you need to replace your current salary and achieve financial independence
About this calculator
The Income Replacement Calculator helps you determine the exact amount of passive income needed to replace your current salary and achieve true financial independence. By analyzing your current income, expenses, and desired lifestyle, this tool calculates the investment portfolio size required to generate sufficient passive income streams. Whether you're planning for early retirement, exploring investment strategies, or setting financial freedom goals, this calculator provides crucial insights into your path toward economic independence and sustainable wealth building.
How to use
Enter your current annual salary, monthly expenses, and expected rate of return on investments. The calculator will determine how much you need to invest to generate enough passive income to cover your expenses. Adjust variables like inflation rates and withdrawal percentages to see different scenarios for achieving financial independence.
Frequently asked questions
What counts as passive income for replacement calculations?
Passive income includes dividends, rental income, interest from bonds, royalties, and returns from investment portfolios that require minimal active management.
How much of my salary should I aim to replace?
Most financial experts recommend replacing 70-80% of your pre-retirement income, though this varies based on your lifestyle and expenses.
What's a safe withdrawal rate for financial independence?
The commonly used 4% rule suggests withdrawing 4% annually from your investment portfolio, though 3-3.5% may be more conservative.