Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Personal Finance How Much Money Do You Need to Live Off Interest? Updated Jun 26, 2025 7-min read Written by Jeff Gitlen, CEPF® Written by Jeff Gitlen, CEPF® Expertise: Student loans, personal loans, home loans, insurance, credit cards Jeff Gitlen, CEPF®, is the director of growth at LendEDU. He graduated from the Alfred Lerner College of Business and Economics at the University of Delaware. Learn more about Jeff Gitlen, CEPF® Most adults have the goal to build enough of a nest egg to retire comfortably. To do so, you need a strategic plan, and the earlier in life you make the plan, the better. Once it’s time to leave the workforce, you may be wondering if living off interest you accumulate from your savings and investment accounts is possible. The short answer is yes, but there are several factors you need to plan for to do so successfully. This guide covers how to live off interest earnings and how much you may need to set aside to achieve this goal. Table of Contents Can you live off interest? How to live off interest Create a diverse portfolio Balance risk and reward How much money do you need to live off interest? Interest on $100,000 Interest on $300,000 Interest on $500,000 Interest on $1,000,000 Interest on $2,000,000 Interest on $3,000,000 Calculator: Enter any investment amount When it’s time to retire Can you live off interest? Yes, it’s very possible to live off interest. First, you have to figure out your own personal situation: (a) how much income you need monthly and annually to live and (b) how much money you’ll need to sock away in savings to achieve that amount of income. The first step in figuring out if you can live off your investments and savings is to determine how much you need to cover your expenses. That begins by working backwards in a sense. Here are the steps to take: Calculate your monthly budget. This will be the cost of your current required and desired expenses. Required expenses are for necessities like housing, health care, and food. Desired expenses are luxuries like travel, entertainment, and possessions. Predict your annual income goal. Once you determine your expenses, you can more accurately predict how much income you need to sustain your lifestyle, and if your current wealth can sustain this for an extended period of time. Multiply the number of anticipated years in retirement by the annual cash flow. This can help indicate if your current savings and investments are enough to survive comfortably. Factor in income in addition to your retirement savings and investments. Social Security amounts vary based on your income and date of birth. You can estimate your Social Security by visiting the SSA website, or by reviewing the Social Security statement you receive in the mail. If you are expecting a pension or other payment in retirement, evaluate these income streams as part of your retirement income as well. These evaluations may seem overwhelming, but financial advisors are available to help you. How to live off interest Create a diverse portfolio Most financial experts recommend investors and savers create a diverse portfolio that balances various investments with different risk levels. This means combining different assets that provide varying levels of returns. For example, one popular option for diversification is to invest in precious metals like gold. Diversification is one of the most foundational aspects of investing, and it becomes that much more important when you plan to live off interest alone. While it is the key to long-term investment success for many individuals, it often requires the help of a professional. Here are a few examples on how to live off interest. These strategies highlight risk and the need for diversification. Read More: The 9 Best Ways to Diversify Your Investment Portfolio Balance risk and reward When considering investments and savings, and the interest you may need to live comfortably in retirement, think through the risk spectrum. Think of investments falling on a straight line, with one end being low- to no-risk investments and the other end being high-risk investments. High-interest savings accounts, certificates of deposit, and some bonds fall on the lower end of the spectrum, while stocks, real estate, and alternative investments like crypto fall on the high-risk end. With more risk, you have the potential to earn more of a reward in terms of interest, dividends, or growth. However, taking on more risk means you could potentially lose your investment. Lower-risk investments provide stable, safe returns, but at a much lower rate than higher-risk options. If you are planning on living off interest earnings, it is important to manage these risks in-line with your income needs and overall tolerance for account fluctuations. How much money do you need to live off interest? Interest on $100,000 If you only have $100,000, it is not likely you will be able to live off interest by itself. Even with a well-diversified portfolio and minimal living expenses, this amount is not high enough to provide for most people. Here is how much interest you would earn investing this amount in various savings vehicles. Investment typeInterest rateAnnual interest earnedSavings account2% – 2.5%$2,000 – $2,500StocksUp to 8%Up to $8,000Bonds2% – 4%Up to $4,000 Interest on $300,000 Having $300,000 set aside to retire may be more feasible to live off interest, but diversification and risk still plays a crucial role in how much you will generate. Here is how that will look. Investment typeInterest rateAnnual interest earnedSavings account2%$6,000Stocks (conservative)4%$12,000Stocks (high-risk)10%$30,000Bonds2.87%$8,610 Interest on $500,000 An investment of $500,000 may get you much closer to your income needs in retirement. Based on similar examples as above: Investment typeInterest rateInterest earned (annually)Savings account2%$10,000Stocks (conservative)4%$20,000Stocks (high-risk)10%$50,000Bonds2.87%$14,350 Interest on $1,000,000 Many investors target $1,000,000 as the magic number for retirement. Here’s how the numbers break down. Investment typeInterest rateInterest earned (annually)Savings account2%$20,000Stocks (conservative)4%$40,000Stocks (high-risk)10%$100,000Bonds2.87%$28,700 Read More: How much interest would you earn on $1 million? Interest on $2,000,000 You might be unimpressed with the interest on $1,000,000. The high-risk stocks example seems closest to providing the annual income needed to fully sustain the average American household and allow for a reasonably good standard of living. And of course, you don’t want your income to depend on high-risk investments. That’s not realistic. Here’s what the earned interest on $2,000,000 looks like. Investment TypeInterest RateInterest earned (annually)Savings account2%$40,000Stocks (conservative)4%$80,000Stocks (high risk)10%$200,000Bonds2.87%$57,400 Interest on $3,000,000 Now we’re looking at some more comfortable numbers for living off interest. If living off interest is a serious goal for you for retirement or earlier, you should probably be aiming for the $2,000,000 and $3,000,000 ranges. Investment TypeInterest RateInterest earned (annually)Savings account2%$60,000Stocks (conservative)4%$120,000Stocks (high risk)10%$300,000Bonds2.87%$86,100 Calculator: Enter any investment amount When it’s time to retire You can see that living off interest in retirement depends on several factors, including how much you have saved and invested, and the amount you need to cover basic and extra expenses throughout your lifetime. Create a realistic picture of your retirement lifestyle and determine the most appropriate time to retire. Also, remember that there could be more expenses later in life due to medical issues, or a need for long-term care services. Include these unknowns when figuring out when you can retire comfortably. You can live off interest alone, but you need to be careful about understanding your expenses and your current and future assets. Investment returns are not guaranteed, and the more risk you take on to achieve a higher return, the greater your probability of losing some of your investment. Be sure to consider these factors closely before deciding to retire and live off interest income alone.