{"id":741514,"date":"2026-08-18T04:50:08","date_gmt":"2026-08-18T04:50:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/741514\/"},"modified":"2026-08-18T04:50:08","modified_gmt":"2026-08-18T04:50:08","slug":"could-your-superannuation-generate-10000-a-month-in-passive-income-by-age-60","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/741514\/","title":{"rendered":"Could your superannuation generate $10,000 a month in passive income by age 60?"},"content":{"rendered":"

Every investor chasing passive income<\/a> eventually runs into the same wall: a big, round target number, with no clear sense of how long it actually takes to get there. <\/p>\n

$10,000 a month is one of the most searched versions of that goal. The figure sounds desirable. It sounds specific. What it doesn’t come with is a timeline. <\/p>\n

There’s a shortcut for that maths. It’s called the rule of 72, and it turns a vague “someday” into an actual number of years.<\/p>\n

\"A<\/p>\n

Image source: Getty Images<\/p>\n

The doubling shortcut<\/p>\n

The rule of 72 is a rough but reliable way to estimate how long an investment takes to double at a given rate of return. Divide 72 by the annual return, and the answer is roughly the number of years to doubling.<\/p>\n

At an 8% average total return<\/a> \u2014 a reasonable long-run assumption for a diversified share portfolio \u2014 that’s 72 divided by 8, or nine years per doubling. It’s an approximation, not a formula from a textbook, but run the actual compound interest maths and it lands within a rounding error almost every time.<\/p>\n

Start with the target. At a 4% yield<\/a> \u2014 a moderate, unfranked dividend yield, before any boost from franking credits \u2014 generating $10,000 a month, or $120,000 a year, in passive income (before tax) requires a portfolio worth approximately $3 million. That’s a big number in isolation. It’s less intimidating with a starting point and a timeline attached.<\/p>\n

Take an investor with $750,000 already invested, compounding at that same 8% average return. One doubling, nine years, gets them to $1.5 million. A second doubling, another nine years, gets them to $3 million.<\/p>\n

And it is worth noting that the doubling comes from compounding, not from additional investments or added capital.<\/p>\n

Eighteen years, two doublings. If that investor is 42 today, the maths lines up almost exactly with Australia’s superannuation preservation age of 60.<\/p>\n

Escape velocity<\/p>\n

Here’s where it gets interesting. That $3 million portfolio doesn’t need the full 8% return to keep paying $10,000 a month \u2014 only the 4% yield component does the work. The other 4%, roughly $120,000 in year one alone, is capital growth that’s never touched.<\/p>\n

That’s the same order of magnitude as the income being withdrawn. The portfolio’s own growth is doing as much heavy lifting as the retiree is asking of it.<\/p>\n

Think of it like a rocket reaching escape velocity. Below a certain speed, gravity always wins \u2014 the rocket falls back to Earth, just as a portfolio drawing down faster than it grows eventually runs dry. At exactly the right speed, it settles into a stable orbit, sustainable, but not going anywhere.<\/p>\n

Above that threshold, it breaks free. It keeps climbing, indefinitely, regardless of how long the journey lasts.<\/p>\n

A portfolio where total return outpaces the withdrawal rate behaves the same way. It doesn’t just fund a comfortable retirement \u2014 it compounds through one, quietly growing larger even as it pays out $10,000 every month, year after year. A broad, diversified holding like the Vanguard Australian Shares Index ETF (ASX: VAS<\/a>), is built to offer both halves of that equation, yield and growth, rather than the high-income, low-growth profile of a pure income fund. <\/p>\n

Foolish takeaway<\/p>\n

None of this is a guarantee. Average returns are exactly that, averages, built from good years and bad ones, and a poor sequence of returns early in retirement can undo tidy nine-year doubling maths in a hurry. Franking credits, contribution timing, and fees all shift the real-world numbers too. <\/p>\n

The underlying principle holds regardless of the exact figures. The gap between what a portfolio earns and what it pays out determines whether that portfolio is slowly falling, holding steady, or genuinely escaping. For long-term investors, aiming for that third outcome, rather than the $10,000 a month figure on its own, might be the more useful goal.<\/p>\n","protected":false},"excerpt":{"rendered":"Every investor chasing passive income eventually runs into the same wall: a big, round target number, with no…\n","protected":false},"author":2,"featured_media":741515,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4233,4176,4174,4175,56,54,55],"class_list":["post-741514","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-editors-choice","tag-finance","tag-personal-finance","tag-personalfinance","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/741514","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=741514"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/741514\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/741515"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=741514"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=741514"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=741514"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}