Enter what you spend per year, what you’ve saved, and what you save annually, and this calculator shows your FI number — the portfolio that makes work optional under the 4% rule — and how many years your current savings rate takes to reach it, with a five-year projection table. The formula and its academic sources are shown below.
How to use this calculator
- Annual expenses — what a year of your life actually costs; this single number sets your FI target, so be honest about it.
- Current portfolio — investable assets: retirement accounts, brokerage, cash you intend to invest. Home equity usually stays out unless you’d sell.
- Annual savings — what you add to investments per year.
- Expected annual return — use a real (after-inflation) figure, e.g. 5–7%, since expenses are in today’s dollars.
The projection table shows your portfolio every five years so you can see how progress accelerates once compounding takes over from raw saving.
What the 4% rule actually says
The 25× multiple is the inverse of a 4% withdrawal rate, and it comes from real research, not folklore. William Bengen tested every historical US retirement year and found that withdrawing 4% of the starting portfolio, adjusted for inflation annually, never exhausted a stock/bond portfolio in under 30 years — even for people who retired into the brutal 1966–1982 market. The Trinity study later reached similar conclusions. Two details are routinely misquoted: the 4% applies only to the first year (afterwards you adjust the dollar amount for inflation, not the percentage), and the finding covers 30-year retirements, not indefinite ones.
Why your savings rate matters more than your return
In the early years, the portfolio is small, so market returns barely move the date — what you save dominates. Someone saving $30,000 a year from zero at 7% hits $1,000,000 in 18 years, and roughly the first half of that money is deposits, not growth. This is why FIRE math obsesses over the savings rate: cutting expenses works twice, shrinking your FI number by 25× the cut and freeing more money to save. The ratio matters more than the income — at a 50% savings rate the loop above lands near 17 years from zero at a 5% real return, whether you earn $60,000 or $200,000. Maxing tax-advantaged accounts helps too — our 401(k) calculator shows how employer matching accelerates the same curve, and the compound interest calculator lets you inspect the growth math month by month.
Limits: sequence risk and what this model ignores
This is a planning model, not a promise. It assumes a perfectly steady return, while real markets deliver lumpy ones — a crash in the first years of retirement (sequence-of-returns risk) can sink a plan that looks fine on average. It ignores taxes on withdrawals, investment fees, changing expenses (healthcare, kids, paid-off mortgages), and any pension or Social Security income. Retirees blunt sequence risk in practice with flexible spending rules — cutting withdrawals in down years — or by holding a year or two of expenses in cash so they never sell into a crash; both meaningfully improve on the rigid withdrawals the historical studies model. And a 100-year cap means some low-savings scenarios simply report “not reached” — a signal to change the inputs, not despair. Treat the FI number as a milestone estimate and revisit it yearly as your real numbers evolve.
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