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How much you need to save every month to earn $40,000 a year in interest alone for retirement - CNBC

Most Americans are confident they will be able to retire comfortably.

A 2019 study by the Transamerica Center for Retirement Studies and the Aegon Center for Longevity and Retirement found that 63% of U.S. workers are confident that they will be able to fully retire and still live well.

And if they plan to stop working in their 60s, that leaves a huge variable of how many years of retirement they will need to fund.

An "interest-only" retirement plan removes one of the biggest fears about life after leaving your job: Will my money outlast me?

Because if you can save enough now, you can fund your retirement by living off your returns without ever touching your nest egg.

NerdWallet crunched the numbers, and we can tell you how much you need to save to get $40,000 every year in retirement, without taking a bite out of your principal.

First, some ground rules. The numbers assume you will retire at 65 and have no money in savings now.

For investing, we assume an annual 6% return when you are saving and a more conservative 3% rate for your interest-only retirement. We do not factor in inflation, taxes or any additional income you may get from Social Security and your 401(k).

Check out this video to learn more.

More from Invest in You:
How much you can expect to get from Social Security if you make $40,000 a year
The real 'Catch Me If You Can' con artist says this classic scam is making a comeback

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

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How much you need to save every month to earn $40,000 a year in interest alone for retirement - CNBC
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