How much money do I need to save to be able to withdraw 20000 per year without spending principal. .03 interest yearly. 25 years of saving.

How much money do I need to save to be able to withdraw 20000 per year without spending principal. .03 interest yearly. 25 years of saving.

 

You will need to save $666,666.67 to allow you to withdraw $20,000 per year for life. This is called " Perpetual Annuity", which means if you multiply $666,666.67 X 3%=$20,000 per year for life.

To save that much money over 25 years @ 3%, you will need to deposit $18,285.25 per year for 25 years.