Portfolio Sizing for Income Generation
Based on our experience, it is typically feasible to withdraw 4% of the value of an equity income portfolio annually while maintaining a low risk of depleting the funds. For instance, as demonstrated in the table below, a portfolio valued at $1.8 million can sustainably generate a monthly income stream of $6,000 over the long term.

    
   

 

    

Portfolio Size*
(As a Function of Required Monthly Income)

   
 
$2,000 / Month
 
$600K
    
 
$3,000 / Month
 
$900K
    
 
$4,000 / Month
 
$1.2M
    
 
$5,000 / Month
 
$1.5M
    
 
$6,000 / Month
 
$1.8M
    
 
$7,000 / Month
 
$2.1M
    
 
$8,000 / Month
 
$2.4M
    
 
$9,000 / Month
 
$2.7M
    
 
$10,000 / Month
 
$3.0M
    
    *The above 'Portfolio Size' analysis assumes a conservative 4% distribution rate. The risk of the portfolio running out of funds over the course of your life becomes greater as the distribution rate increases.    
         
   

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