Free calculator

Financial Independence Calculator

Enter your take-home pay, what you spend and what you’ve invested to see your FI number (the amount that could cover your spending) and roughly how many years it could take to get there, with a table showing how your savings rate changes the date.

Time to financial independence

35 years 4 months

Around February 2062, if the assumptions hold

Your FI number: $1,400,000; 25× yearly spending
Savings rate: 20%; of take-home pay
Invested per year: $14,000; $1,167 a month

Spending $56,000 a year at a 4% withdrawal rate gives a target of $1,400,000, 25 times your spending. Investing $14,000 a year (a 20% savings rate) on top of the $15,000 you have now at 5% a year after inflation would get there in about 35 years 4 months, around February 2062. $509,667 of that would be money you put in and $893,536 investment growth. Returns aren’t guaranteed, so the real date could be earlier or later.

Years to financial independence by savings rate

Same take-home pay, investments, return and withdrawal rate; only the share you save changes. Saving more also lowers the target, because you spend less. Your own rate is highlighted.

Spending, target and years to financial independence at each savings rate
Savings rate	Spending	Target	Years
10%	$63K	$1.6M	48.9
15%	$60K	$1.5M	41.1
20%(you)	$56K	$1.4M	35.3
25%	$53K	$1.3M	30.8
30%	$49K	$1.2M	27.0
35%	$46K	$1.1M	23.8
40%	$42K	$1.1M	20.8
45%	$39K	$963K	18.3
50%	$35K	$875K	16.0
55%	$32K	$788K	13.8
60%	$28K	$700K	11.9
65%	$25K	$613K	10.1
70%	$21K	$525K	8.3

Spending is per year. All amounts are in today’s dollars.

If the assumptions are less kind

Your savings stay the same. A lower return makes the money grow more slowly; a lower withdrawal rate means a bigger target.

Target and years to financial independence under different assumptions
Assumptions	Target	Years
Your assumptions5% return, 4% withdrawal	$1.4M	35.3
Return 1 point lower4% return, 4% withdrawal	$1.4M	39.7
Return 2 points lower3% return, 4% withdrawal	$1.4M	45.5
3.5% withdrawal rate5% return, 3.5% withdrawal	$1.6M	37.7
3% withdrawal rate5% return, 3% withdrawal	$1.9M	40.3

Your investments on the way to your FI number

The line ends when your investments reach $1,400,000. All amounts are in today’s dollars.

Investments
Money you put in

What your FI number is made of

Money you put in: $509,667(36%)
Investment growth: $893,536(64%)

Year by year

35 years 4 months to $1,400,000

What this calculator assumes

Your FI number is your yearly spending divided by the withdrawal rate. It’s a planning target based on how withdrawal rates held up in the past, not a promise that the money will last.
Your take-home pay and spending stay the same in today’s dollars until you reach the target, and you’d spend the same amount each year afterwards.
Everything you don’t spend is invested, one twelfth at the end of each month.
Your investments grow at the same return every year, after inflation, compounded monthly at the equivalent monthly rate. Real returns vary from year to year and can be negative for long stretches.
No taxes, fees, Social Security, pensions or other income are included, and you never take money out before reaching the target.
The projection stops after 100 years.

These are estimates to help you understand the numbers, not financial advice. Check the exact figures with your lender or a qualified adviser before making a decision.

What financial independence means

Financial independence (often shortened to FI) is the point where your investments could pay for your spending, so working becomes a choice rather than a need. People who aim to get there early call it FIRE: financial independence, retire early. You don’t have to stop working to find the number useful. It tells you how far your savings are from covering your life.

This calculator estimates how many years it could take, at your current pay and spending, for your investments to reach that point. The answer depends mostly on your savings rate, the share of your take-home pay you don’t spend.

How the calculator works

Your FI number is your yearly spending divided by a withdrawal rate. The withdrawal rate is the share of your investments you’d take out in the first year of living off them. At 4%, the target is 25 times your spending: $40,000 a year needs $1,000,000.

Your savings are your take-home pay minus your spending. The calculator invests one twelfth of that at the end of every month, on top of what you’ve already invested, and grows the total at the return you enter. It counts the months until the balance reaches your FI number.

The return is a real return: growth after inflation (rising prices) is taken off. Investor.gov, the SEC’s site for investors, defines real return as what an investment earns after inflation and taxes, and notes that it’s lower than the headline (“nominal”) return. Using a real return keeps every number in today’s dollars, so the target means what $1,000,000 buys now, not in 30 years.

Your savings rate works twice. Spending less leaves more to invest, and it also lowers your FI number, because the target is a multiple of what you spend. That’s why the table of savings rates falls so steeply at first.

Worked example

Say you take home $70,000 a year, spend $56,000 and invest the other $14,000. That’s a 20% savings rate. You already have $15,000 invested, and you assume a 5% return after inflation and a 4% withdrawal rate.

The target: $56,000 ÷ 4% = $1,400,000, which is 25 times your yearly spending.
The time: about 35 years 4 months. By then you’d have put in $509,667 of your own money, and growth would have added $893,536.
Five points more: spend $52,500 instead and your savings rate is 25%. The target falls to $1,312,500 and the time to about 30 years 9 months, roughly 4 years 7 months sooner.

Now make the assumptions less kind. With a return one point lower (4%), the original plan takes about 39 years 8 months. With a 3.5% withdrawal rate, the target rises to $1,600,000 and it takes about 37 years 8 months. Neither the return nor a safe withdrawal rate is known in advance, which is why it’s worth looking at a range rather than one date.

Where the 4% comes from

In 1994, financial planner William Bengen tested withdrawal rates against US stock and bond returns and inflation since 1926. With a portfolio of half stocks and half bonds, someone who withdrew 4% in the first year, then raised that dollar amount with inflation each year, never ran out of money in less than 33 years, whatever year they started. At 3% to about 3.5%, the money lasted at least 50 years. He called a 5% start risky.

In 1998, three Trinity University professors (Cooley, Hubbard and Walz) ran a similar test. With withdrawals raised for inflation, a 4% start lasted 30 years in 95% to 98% of past periods for portfolios that were half or more in stocks. They also concluded that early retirees, who need their money to last longer, should plan on lower withdrawal rates.

Both studies describe the past, which doesn’t guarantee the future. Both also looked at retirements of around 30 years. If you reach FI at 40, your money may need to last 50 years or more, so a 3% or 3.5% rate is closer to what held up over that long in Bengen’s tests. Try it in the calculator: the target rises and the date moves out.

Choosing a return

No one knows future returns. As a reference point, Bengen’s paper notes that in the historical data he used, which starts in 1926, a mix of 60% stocks and 40% bonds earned almost 5.1% a year after inflation. The calculator starts at 5%, close to that. A portfolio with more bonds or cash would likely earn less, and any portfolio can have long stretches of poor returns. Entering 3% or 4% shows a more cautious plan, and the “If the assumptions are less kind” table under the results runs those numbers for you.

What the result leaves out

Taxes. Withdrawals from a traditional 401(k) or IRA are generally taxed as income, so you may need to take out more than you spend.
Changes in spending. Children, a paid-off mortgage or health insurance before Medicare can move your spending, and with it your FI number.
Other income. Social Security, a pension or part-time work would lower what your investments have to cover.
The order of returns. Smooth yearly growth is an average. A crash just after you stop working does more damage than the same crash years earlier; our guide to sequence of returns risk explains why.

For the arithmetic behind the savings-rate table, see why your savings rate decides your retirement date; for more on the withdrawal rate, read our 4% rule guide. To see how a single monthly amount grows, try the compound interest calculator.

Guides on this topic

Frequently asked questions

What is financial independence?

It’s the point where your investments could pay for your spending without a paycheck, so working becomes optional. A common way to estimate it is to divide your yearly spending by a withdrawal rate, such as 4%. That gives your FI number: $40,000 a year of spending at 4% means $1,000,000.

What is the 4% rule?

It comes from a 1994 study by financial planner William Bengen. He found that, using US market history since 1926, someone who took out 4% of a half-stock, half-bond portfolio in the first year and then raised that amount with inflation never ran out of money in less than 33 years. It’s a finding about the past for retirements of about 30 years, not a guarantee.

Is 4% safe for early retirement?

It’s less certain. The 4% research looked at retirements of around 30 years, and someone who stops working at 40 may need their money to last 50 years or more. The 1998 Trinity study concluded that early retirees should plan on lower withdrawal rates, and in Bengen’s tests 3% to about 3.5% lasted at least 50 years. Try 3% or 3.5% in the calculator to see what that does to the target and the date.

What is a savings rate?

It’s the share of your take-home pay that you don’t spend. If you take home $70,000 and spend $56,000, you save $14,000, a 20% savings rate. In this calculator it matters twice: a higher rate means more invested each year and a smaller FI number, because the target is a multiple of your spending.

What is a real return, and why does the calculator start at 5%?

A real return is growth after inflation is taken off, so it shows what your money can actually buy. No one knows future returns. As a reference, Bengen’s paper notes that a 60% stock, 40% bond mix earned almost 5.1% a year after inflation in the historical data he used, which started in 1926. The calculator starts at 5%. Trying 3% or 4% shows a more cautious plan.

Does my employer’s 401(k) match count?

It can. An employer match is extra money invested for you, so add it to both your take-home pay and your savings: increase take-home pay by the yearly match and leave spending the same. Your savings rate and the amount invested then both go up.

Why is my result a little different from our savings-rate guide?

The table in our savings-rate guide starts from zero and adds savings once a year. This calculator includes what you’ve already invested and adds savings every month, so money starts growing a little sooner. Starting from zero at a 10% savings rate, a 5% return and 4%, it gives about 51 years, the same as the yearly method once rounded.