You have built your wealth and now you want it to start producing a regular income. Perhaps you have sold your company, you are approaching the end of an active career, or you simply no longer want your standard of living to depend on earned income.
The question then sounds deceptively simple: how much can I withdraw from the portfolio each year so that the money lasts?
There is no single universal percentage. Income from investments depends on how long you will be drawing it, on the structure of the portfolio, on inflation, on your other income, on taxes, and on whether you intend to spend the capital gradually or preserve a significant part of it for the next generation.
That is why an income plan is built differently from the portfolio of someone who is still accumulating wealth. What such a plan looks like in practice is described in the story of a client who kept a table of her withdrawals for seven years.
How much wealth do you need for an income?
For a first orientation, the relationship between the size of the portfolio and the income can be turned around.
If you wanted to draw 1.2 million crowns a year from the portfolio, that is 100,000 crowns a month, an initial withdrawal rate of 4% would correspond to a portfolio of 30 million crowns. At 3% it is already 40 million.
That does not mean 30 million is enough for an income of 100,000 crowns. Both figures only illustrate the relationship between the size of the wealth and the withdrawal. They do not account for taxes, fees, other income or the specific composition of the assets. You can try a rough projection in our investment calculator.
Even the well-known four percent rule is not a universal instruction. Current Morningstar research for 2026 works with an initial withdrawal rate of 3.9% over a model thirty-year period, assuming the investor wants the same real amount each year, increased by inflation, and the model has a ninety percent probability that the money lasts the whole time. The result changes with the length of the period, the composition of the portfolio and the way the money is drawn.
Someone who wants to stop working at 50 is therefore solving a different problem from someone who starts drawing on their wealth at 65. How the individual profiles differ is explained in Conservative, balanced or dynamic?.
An income is not the same as dividends
A common idea says that the ideal income comes from investing in dividend stocks and living only on the dividends paid out. That needlessly narrows the investment space.
For funding living expenses it does not matter whether the money technically arrived as a dividend, as interest or from selling part of an investment. What matters is the total return of the portfolio, its risk, its liquidity and the tax consequences.
A portfolio aimed primarily at dividend yield can also mean higher concentration in particular companies, sectors or regions. A high dividend on its own says nothing about whether the investment produces a higher total return.
Income can therefore come from a combination of portfolio income and a planned sale of part of it. That allows the portfolio to be built around the needs of the investor, instead of the strategy being subordinated to a requirement that every investment must produce regular cash on its own.
The biggest risk can arrive right at the start
Imagine two investors with portfolios of the same size. Over twenty years both achieve the same average return. Only the order of the good and the weaker years is reversed.
If they withdraw nothing, the order of returns does not fundamentally change their final result. Once they draw regularly, it does.
When a significant decline arrives in the first years of drawing an income, the investor has to fund their expenses from the portfolio precisely when its value is lower. They sell a larger share of the assets, and that part of the capital can no longer take part in any later recovery.
This is known as sequence-of-returns risk, the risk of the order in which returns arrive.
Morningstar research points out that large declines in value in the first years of drawing can significantly reduce how long the income lasts. Vanguard similarly notes that a market decline shortly before or after the start of withdrawals can be particularly awkward for a portfolio, because the investor is drawing money for everyday expenses at the same time.
So it is not enough to calculate an average expected return and subtract the desired income from it. With a portfolio you live on, it also matters when the returns arrive.
What if markets fall just as you start withdrawing?
The answer is not created at the first decline. It should be part of the plan before the income starts.
The portfolio has to allow not only for long-term growth but also for liquidity to cover regular expenses. Part of the money may therefore have a different function from the long-term growth component. The point is to limit situations where the investor has to sell risk assets only in order to pay everyday bills.
The second option is flexibility in the income itself. Someone who can postpone part of their spending in a poor year, or temporarily draw less, has different options from someone who needs a fixed amount every year.
Morningstar research therefore analyses flexible strategies alongside fixed withdrawals. They can allow a higher initial or lifetime withdrawal, in exchange for income that is less predictable from year to year. We have written in more detail about how a portfolio behaves in such periods in When markets fall: what to do with a portfolio and what not to do.
It also matters where the money comes from
The wealth of someone with tens of millions of crowns rarely sits in a single investment account. It may include securities, cash, property, a stake in a company or other assets. Alongside the investment portfolio, a person may receive rent, later a state pension or other regular income.
So the investment portfolio does not have to fund the entire standard of living on its own. For someone who has recently sold a company, the more important decision is usually which part of the capital should produce income and which should keep working.
Taxes play a role as well. From 2026 the 40 million crown cap on the exemption of income from the sale of securities and company stakes, where the holding-period test is met, has been abolished in Czechia. The 100,000 crown value test remains. The actual tax outcome depends on the type of investment, the holding period, tax residence and other circumstances. The change is confirmed by the Czech Financial Administration overview of 2026 tax changes.
In long-term income planning it is therefore not enough to decide how much you want to spend each month. You also need to decide which assets the money will come from in each of those years.
Should the wealth last for you, or for the next generation too?
This decision can change the whole calculation.
Some people want to use their wealth gradually during their lifetime. Others want to draw an income and preserve the real value of the capital at the same time. Others again expect to pass a significant part on to their children. The same desired income can therefore lead to three different strategies.
The expected length of drawing enters the plan as well. In its current analysis Morningstar estimates an initial withdrawal of 3.9% for a model portfolio of 40% equities and 60% bonds over a thirty-year horizon at a ninety percent probability of success. Over a forty-year horizon it comes out at only 3.3%.
A difference of a few years is therefore not cosmetic. On a portfolio in the tens of millions it can mean hundreds of thousands of crowns a year.
A good income plan does not start with a percentage
The question of how much you can send yourself each month comes last.
First we need to know what you own, how much of it is genuinely investable, what other income you expect, how long the portfolio has to fund your expenses and what should remain of it one day. Only then can we set the structure of the portfolio and the way it is drawn.
At Melior Invest we therefore do not see an income plan as a single investment product. It is a plan that connects your wealth, your future spending, the investment strategy and the way you want to use your capital over the coming decades.
If you have built your wealth and are working out how much you can draw from it so that it lasts, we can calculate it for your specific situation.
