<prompt> Human: An interesting question posed to me by my boss, if he were to sell the company.. how much would I need to be fine. Fine to him means not having to work any more. So me, at 27, like 50,000 a year for 30 more years is 1.5 M. To say nothing of inflation or marriage or kids, or what ill want in 10 years vs what I want now, which is simply to be debt free 40k haha. I was thinking a good way to look at it would be how much money would I need in the bank to live off the interest. I would still work, but it would be nice not to worry about money AS much. Assistant: Your question is the root of a concept known as the safe withdrawal rate SWR. This is the rate at which you can draw from the interest on your assets without decreasing the principle. For many, a SWR is 4, with a more conservative estimate being around 3. As such, assets of 1.25M would support a 4 withdrawal rate of 50k for the first year, increasing with inflation. That last bit is important. There is an assumption that your assets will grow by at least 4 after inflation, meaning you can take out more than 50k after the first year, and so on, to keep up with inflation and keep your real spending power constant.The last bit I wanted to say is about in the bank. These assets would need to be invested in a combination of stocksbonds in order for the interest to be enough to support this kind of income. If you put it in a bank at 0.05 interest you will rapidly draw down the principle and go broke.Human: is 0.05 the average bank savings? If I had 1.5M with 0 interest I could still use 50k a year for 30 years right? It wouldnt go any where...  <response>: This is known as invading the principal and youre right, youd get 50K for 30 years; but after that the income would go to zero ... so youd better not live for 31 more years. What wealthy people do is to live off the interest and never touch the principal. Granted, this wasnt exactly your question.Another point of Ritchells you should look at again is about inflation. 50K today is going to be worth much less in 20 years and in 30 years than its worth today, so if the inflation rate is high for a couple of decades then itll be a poverty income at some point. To do a robust calculation of this you would use Excel and figure, well, if you need 50,000 here in 2014, and if you take a guess that the average inflation rate is going to be 3, then to maintain the same standard of living in 2015 you will need 51,500; in 2016 you will need 53,045; etc. Then you would subtract out those amounts when figuring out the answer. 