If you have enough money in a savings account, it can be possible to live off the interest. Here's how to determine how much you would need in the bank to do this, how much you can expect to save at your current rate, and another way of building a million-dollar nest egg that could be a better idea.

How much money do you need to live off the interest?

The answer to this question depends on a couple of variables -- specifically, how much income you'll need to live comfortably, and what interest rate you're getting on savings.

Having said that, here's a quick (but imperfect) calculation method. Simply take the amount of annual income you want and divide it by the interest rate you expect to receive, expressed as a decimal. For example, if I need $40,000 per year to live comfortably and expect to receive 4% interest on my savings, $40,000 divided by 0.04 shows that I'll need $1,000,000 to live off my interest.