Financial Independence Calculator
Calculate your financial independence (FI) number from annual expenses and a safe withdrawal rate, plus estimated years to reach it from your savings and contributions.
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Financial Independence Number
$1,000,000
Estimated Years to FI
20.3 years
How Your Financial Independence Number Is Calculated
Your FI number is the portfolio size needed to sustainably cover your annual expenses using a safe withdrawal rate, commonly set at 4% based on historical market research. Dividing annual expenses by the withdrawal rate gives the target portfolio. From there, the calculator projects how many years of saving and compounding it will take to reach that number, given your current savings, monthly contributions, and expected investment return.
(e.g. Annual Expenses / 0.04 = 25 × Annual Expenses)
Example
With $40,000 in annual expenses and a 4% withdrawal rate, the FI number is $1,000,000 — 25 times annual expenses. Starting from $50,000 in savings, contributing $1,500 a month, and earning a 7% average annual return, it would take roughly 21 years to reach that $1,000,000 target.
Common Use Cases
- Setting a concrete savings target for early retirement or financial independence.
- Estimating how many years of saving remain until reaching that target.
- Testing how a higher monthly contribution shortens the timeline.
- Comparing FI numbers under different safe withdrawal rate assumptions.
FAQs
Why is 4% the default withdrawal rate?
The 4% rule comes from historical research (the Trinity study) suggesting a diversified portfolio could sustain a 4% inflation-adjusted annual withdrawal over a 30-year retirement with a low risk of running out of money. It's a widely used starting point, not a guarantee.
Should I use a lower withdrawal rate for a longer retirement?
Many people planning an early retirement of 40+ years use a more conservative rate, like 3-3.5%, which raises the FI number but reduces the risk of depleting savings over a longer time horizon.
Does this account for inflation?
The expected return you enter should ideally be a real (inflation-adjusted) return if you want the years-to-FI estimate to reflect purchasing power accurately. Using a nominal return without adjusting for inflation will understate how long it actually takes in real terms.