Income Replacement Calculator
Find out how large an investment portfolio you need to fully replace your salary with passive income by retirement. Essential for anyone planning financial independence or early retirement.
Last updated: September 2026
Formula below · 2 sources (CFPB, Wikipedia) · Updated Sep 2026
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About this calculator
This calculator estimates the portfolio needed at age 65 to sustain a target income stream, expressed in the nominal dollars of that future year. First, the required portfolio in today's dollars is: neededPortfolio = (currentSalary × desiredReplacement%) / withdrawalRate%. For example, replacing $60,000/year at a 4% withdrawal rate requires a $1,500,000 portfolio in today's money. Second, because prices rise until you retire, that target is grown at your expected inflation rate to age 65: FV = neededPortfolio × (1 + inflation%)^(65 − currentAge). Growing the target by an investment return would be wrong — returns grow your savings, not the cost of the life you want to fund. Enter 0% inflation to see the target in today's dollars. The safe withdrawal rate (commonly 4%, from the Trinity Study) represents the percentage you can withdraw in the first year, then adjust for inflation, without depleting the portfolio over a 30-year horizon.
How to use
Example: salary $80,000, 100% replacement, 4% withdrawal rate, 3% expected inflation, current age 35. Step 1 — Needed portfolio in today's dollars = ($80,000 × 1.00) / 0.04 = $2,000,000. Step 2 — Years to 65 = 65 − 35 = 30. Step 3 — Inflate to the retirement year: $2,000,000 × (1.03)^30 = $2,000,000 × 2.4273 = $4,854,525. You need roughly $4.85 million in 2056 dollars — the same purchasing power as $2 million today — to replace your $80,000 salary at a 4% withdrawal rate. Enter 0 for inflation to see the $2,000,000 figure directly.
Frequently asked questions
What is a safe withdrawal rate and how does it affect how much I need to retire?
The safe withdrawal rate (SWR) is the percentage of your portfolio you can withdraw annually without running out of money over a long retirement. The most cited figure is 4%, derived from the Trinity Study analyzing historical U.S. stock and bond returns over 30-year periods. Using a lower SWR like 3% requires a larger portfolio but provides more security, especially for early retirees with a 40+ year horizon. A higher rate like 5% reduces the required portfolio but increases the risk of depleting funds in a market downturn.
How does my current age affect the income replacement target?
Your age sets how many years of inflation the target is grown by: (65 − currentAge) years, so a 35-year-old's nominal target is inflated over 30 years versus 10 for a 55-year-old. The target in today's dollars is the same at any age. Separately, the younger you are, the more time your investments have to grow toward it — starting 10 years earlier can more than double the growth on the same invested principal. Early starters can also afford to take on slightly more investment risk, potentially accessing higher long-term returns.
What inflation rate should I use when calculating income replacement needs?
US consumer prices have risen about 3% a year on average over the long run, and the Federal Reserve targets 2%. Using 2.5–3% is a reasonable planning assumption; run 2%, 3% and 4% to see the range. Enter 0% to see the target in today's dollars, which is often the easier number to compare against your current savings. Investment returns are a separate assumption: they determine how fast your savings grow toward this target, not the size of the target itself.