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At a 4% yield after 15% tax and costs, $5,000 a month takes about $2,218,487 invested — $60,000 a year of income.
Wanting $5,000 a month means needing $60,000 a year, and once tax and fund costs are taken off the top, the portfolio has to produce more than that to deliver it. At a 4% yield with a 10% safety margin, that works out to roughly $2,218,487 of invested capital. Starting from $100,000 and adding $1,000 a month, you are about $2,118,487 short — the gap the plan has to close.
Treat the yield as the assumption it is, because it decides everything. Drop from 4% to 3% and the same $5,000 a month needs $3,105,882 instead — $887,395 more capital for the identical lifestyle. Push to 6% and it falls to $1,411,765, but a yield that high usually means taking on more risk than an income portfolio should. The table runs the full range so you can see the shape rather than trusting one number.
Required Capital, Yield, Taxes & Gap
Required Capital
Annual target: $84,486 · Net yield: 3.0%
Capital Gap
$2,739,851
3.5% covered
Current Net Income
$2,975
$248 / mo
Time to Target
63.3 yrs
$1,000/mo saved
Monthly Needed
$19,428
10-yr target
Capital Needed by Yield
Income Bridge
Capital Runway
Income Math
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After 15% tax on the income, 0.5% fund costs and a 10% safety buffer, in today’s money.
| Yield assumption | Capital needed | Versus 4% |
|---|---|---|
| 3% | $3,105,882 | +$887,395 |
| 3.5% | $2,588,235 | +$369,748 |
| 4% | $2,218,487 | — |
| 5% | $1,725,490 | −$492,997 |
| 6% | $1,411,765 | −$806,723 |
| 7% | $1,194,570 | −$1,023,917 |
Monthly income targets