How do you integrate non-investment passive income into retirement planning?

[canadian]

I have a book series that generates a couple thousand in income every month. My main professional efforts are towards increasing that. I'm just about at the point where my passive income pays all my expenses.

Except, I am not retired, because it is not reasonable to expect these royalties to persist for the rest of my life. However, it is reasonable to expect them to persist for several years. Given that, how do I integrate them into a calculation for how much money I would need to retire?

[2527]

Here is a mental framework to consider.  Let's say the passive income is $50,000 per year and it will last for 3 years after you stop working.  That's $150,000.  After tax, it might be around $100,000.  If you invest that $100,000, you should expect to be able to withdraw 4% per year which is about $4,000 per year.  Of course, you can adjust the numbers to better fit your reality. 

[SunshineGirl]

Being in a similar situation, I can tell you that I don't count on any royalties at all for retirement purposes, so any money I make now, I save and hope to generate income with it from interest, dividend yields or capital gains. I'd use the money to pay down the house or otherwise lower expenses for the long-term. AND find a way to maximize that income in the now. 

[jamccain]

Right now...it's just income and should be treated as such. 

For passive income to contribute to your retirement picture it would have to satisfy two things:
1.  Persist to the end of your life (or a date where you have another stream of income to take it's place. i.e. it would last to 67 when you would replace it with SS)
2.  It adjusts for inflation. 

Otherwise, it's just income and you have to search for an investment vehicle to put it in that satisfies the stated criteria.   

[arebelspy]

Use www.cfiresim.com and put in the extra income you expect in year 1, then year 2, etc.

It's much better than a generic X% SWR and can run projections for you based on various royalty assumptions.