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How to Retire With $45,000 Per Year in Passive Income at Age 45

Oliver Rossi | Stone | Getty Images

Being a millionaire isn't that uncommon after a lifetime of working and saving.

About 1 in 10 Americans in their 60s and 70s have over $1 million in savings, according to the 2020 Road to Retirement Survey by TD Ameritrade.   

If you want to retire a millionaire in your 40s, however, you will need to start saving a hefty amount of money early in your career.

CNBC crunched the numbers, and we can tell you how much you need to save now to potentially get $45,000 of passive income every year in retirement. 

First, some ground rules. The numbers assume you will retire at 45, have no money in savings now and plan to save a substantial amount of income to reach your goal. 

For investing, we assume an annual 4% return when you are saving. We do not factor in inflation, taxes or any additional income you may get from Social Security and your 401(k).

In retirement, we use the "4% rule," which is a general principle that says you can comfortably withdraw 4% of your portfolio every year. 

It is important to note with the recent market volatility, there is a risk you'll have to lower your spending percentage in the future.

Check out this video to get a full breakdown of the numbers.


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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

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