Passive Income Target Calculator
Calculate how much capital you need to generate a target monthly passive income from dividends, rental income, or investment returns.
What Is Passive Income? Passive income is money earned from capital you have already deployed — dividends from stocks, interest from bonds, rent from property, or distributions from funds. You are not actively working for the income; your money is working for you.
The Core Formula Capital needed = Annual income target ÷ (After-tax return rate) After-tax return = Annual return % × (1 − Tax rate %) Real return = After-tax return − Inflation rate
Nominal vs Real (Inflation-Adjusted)
- Nominal: Ignores inflation. Shows the capital needed based on your stated return rate.
- Real (inflation-adjusted): Accounts for the fact that $3,000/month today buys less in 20 years. To maintain your purchasing power, your real return must exceed inflation.
The 4% Rule (FIRE Community) The “4% rule” states that withdrawing 4% of a portfolio per year is historically sustainable. That means you need 25× your annual spending invested to be financially independent. Example: $3,000/month × 12 = $36,000/year → 25× = $900,000 required.
Important Caveats
- Returns are not guaranteed. Past performance does not predict future results.
- Tax treatment of passive income varies (dividends, capital gains, rental income).
- Inflation erodes purchasing power over time — use the real return calculation for long-term planning.
- This calculator does not account for portfolio rebalancing, sequence-of-returns risk, or tax-loss harvesting.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
SuperGlobalCalculator is independently built and maintained. See how we build and verify our calculators.